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Medicaid expansion leader contends if the feds fail to grant the state a needed waiver the legislature won’t fix Healthy Michigan

June 30, 2015

A chief architect of the Healthy Michigan law said last week if the federal government doesn’t sign off on a second waiver to continue the expanded Medicaid program, there’s little hope the Legislature will step in to save it.

“If the second waiver is not approved, there is very low probability that we would take up amending Healthy Michigan to allow it to continue,” said Sen. Mike Shirkey (R-Clarklake), who helped write the 2013 legislation. 

But state officials already knew the stakes are high when it comes to obtaining the waiver to continue the state’s Medicaid expansion program, which now provides health coverage for close to 600,000 people. 

That’s because if the feds don’t sign off on this waiver, the program must end in April 2016, according to state law.  

A chief architect of the Healthy Michigan law said Wednesday if the federal government doesn’t sign off on a second waiver to continue the expanded Medicaid program, there’s little hope the Legislature will step in to save it.

“If the second waiver is not approved, there is very low probability that we would take up amending the Healthy Michigan to allow it to continue,” said Sen. Mike SHIRKEY (R-Clarklake), who helped write the 2013 legislation. 

But state officials already knew the stakes were high when it comes to obtaining the waiver to continue the state’s Medicaid expansion program, which now provides health coverage for close to 600,000 people. 

That’s because if the feds don’t sign off on this waiver, the program must end in April 2016, according to state law. 

State officials said the Healthy Michigan law set specific parameters for what must be in the waiver request submitted to the feds. One of the potential sticking points is that the cost-sharing increase Michigan is asking enrollees to take on goes beyond federal law (See “Healthy Michigan Architects Hopeful Feds Will Grant 2nd Waiver,” 3/9/15).  

Healthy Michigan already requires its participants to share costs now. But the second waiver is asking to bump up the requirement to 7 percent of a person’s income, from the current 5 percent. 

Former state Medicaid Director Steve FITTON had said, “the feds have been pretty tough on the 5 percent threshold historically” (See “Administration Begins Push For 2nd Medicaid Expansion Waiver,” 3/3/15). Shirkey has previously said, “They have established that the 5 percent hurdle is something that they’re not willing to go beyond.”  

The feds told Fitton a few months back that approving the waiver, based on the “straightforward application of the elements of the 2nd waiver,” was considered “very difficult” (See “Push For 2nd Medicaid Expansion Waiver Labeled `Very Difficult,'” 4/17/15).  

So if the feds don’t budge on what the state is asking for, another option could’ve been to open up the Healthy Michigan law. But Shirkey Wednesday seemed to rule out that option altogether. 

“They need to approve what we have in the bill,” Shirkey said, adding that if the feds try to dramatically change what the state has in its second waiver, the Legislature would likely frown on that, as well. 

But the federal officials have been engaged on the issue, they want to help the state and they understand what’s at stake, said Jackie PROKOP, the policy program division director for the Michigan Department of Health and Human Services (DHHS). 

Former Department of Community Health Director Jim HAVEMAN has said he believes the state just needs time to prove its case (See “Former DCH Director: Healthy Michigan Waiver Will Be Approved,” 5/6/15).  

Prokop and the DHHS held an informational hearing about the second waiver Wednesdayy. The state said it has submitted concept papers to the feds, explaining what the state plans on submitting as part of the waiver request, which is officially due Sept. 1. 

The idea is to get the conversation started with the Centers for Medicare and Medicaid Services (CMS), Prokop said.  

The state’s request primarily involves what happens to Healthy Michigan enrollees between 100 and 133 percent of the federal poverty line once they’ve been in the program for 48 months. 

That amounts to about 100,000 of the 600,000 enrollees, according to state data. The first people in Healthy Michigan wouldn’t hit the 48-month mark until April 2018, according to the state. 

According to the Healthy Michigan law, those enrollees would have two choices at that point. 

First, they could exit Healthy Michigan and acquire insurance in the private insurance marketplace. The state’s health insurance marketplace is run by the federal government through healthcare.gov. 

Or, the second option is to remain in Healthy Michigan, but be subject to the increased cost-sharing requirements described above. 

When asked about the possibility that the feds come back and suggest opening up the Healthy Michigan law for changes, Prokop said the state has not heard that from the feds, yet. 

The state is actually pursuing a couple different options for getting permission to continue Healthy Michigan. 

One waiver, known as the 1115 waiver amendment, is the one the state knows it has to submit to the feds. It has to do with cost sharing changes. 

But the state also submitted its concept paper for getting a 1332 waiver option, which may be needed to address enrollees going back to the private insurance marketplace at the end of the 48 months. 

State officials believe the 1115 waiver could knock out both of those elements, but they’re not sure if the feds would also prefer the 1332 waiver to satisfy the requirements.

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