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Medicaid reform passes in the House of Representatives

June 15, 2013

In yet another historic vote, the Michigan House of Representatives approved legislation that will contain healthcare costs for small business and provides much needed reforms to the state’s Medicaid program.

The fact is we live in a society that demands that access to healthcare be available to everyone without regard for economic status.  Yet as the cost and cost shift increases, the number of payers into the system continues to decrease at an alarming rate.  Small business owners are repeatedly confronted with increasing premium rates and declining access to benefits.

Utilizing federal funds to cover the previously uninsured population will reduce the amount of uncompensated care in the system and will in turn hold down premium rates for payers that makes this the most historic reform to the state’s healthcare system.  Initially, SBAM lending its support was a bit of a leap of faith, as there was no guarantee that the cost savings we believed should result could be realized. However, the structure set forth in the final bill establishes a baseline for uncompensated care and require the Director of Community Health to consider reductions in uncompensated care post reform. The Director of Insurance and Financial Regulation will provide proper oversight and give rate payers the opportunity to engage in the rate making process to maximize cost savings.

Extending coverage through Medicaid should not be the final destination for this population.  Instead it should be provisional coverage that ultimately helps steer folks toward healthy behavior, preventative health maintenance and provides incentives to discover other avenues to obtain coverage.  To simply expand the population to able bodied adults without an expectation that enrollees take some ownership in their healthcare would be counter to cost containment goals.  The final bill strikes a balance between providing coverage for those who need it, while obliging those taking advantage of the program to have some stake in their healthcare decisions. 

Policymakers in Washington would be well served to use what’s been happening in Lansing as an example.  By working together in a bi-partisan manner, the Medicaid reform proposal will go a long way in holding costs down for job providers by applying free market principles to healthcare reform.  House members courageously wrestled control of Medicaid expansion prescribed by the Affordable Care Act to make it a better fit for our state.

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