State: Keeping expanded Medicaid costs $800M under GOP bill

LANSING, Mich. (AP) — It could cost Michigan up to $800 million a year to keep its Medicaid expansion at current enrollment levels if cuts approved by the U.S. House are enacted, top officials in Gov. Rick Snyder’s administration warned Monday while defending a program they said is working and saving lives.

Legislation passed by the Republican-controlled House, and pending in the GOP-led Senate, would halt extra federal funds in 2020 that 31 states get for the expansion of Medicaid under the 2010 federal health care law. Michigan has 660,000 adult enrollees who make too much to qualify for traditional Medicaid insurance but are eligible for coverage through the expansion plan, known as Healthy Michigan.

State Health and Human Services Director Nick Lyon and state budget director Al Pscholka said it would be “very tough” to pay an additional $800 million annually to keep the program fully intact. Under the House bill, states would only continue to receive enhanced federal matching funds for those enrolled at the end of 2019 — not new participants or former enrollees who need coverage again.

Lyon said churn can be high in states’ Medicaid expansion programs, with roughly half of enrollees dropping out over a 1½-year period due to making more money, obtaining employer-provided coverage or other reasons.

The decision by the Republican governor and the GOP-led Legislature to expand Medicaid starting in 2014 “was simply the right thing to do,” Pscholka told reporters during an event hosted by the Modern Medicaid Alliance. The national group of health insurers and others is educating the public about the benefits of Medicaid, the joint federal-state program that serves 2.4 million Michigan residents — a quarter of the state’s population.

The media briefing was held at the Care Free Medical and Dental Clinic in Lansing, which treats lower-income patients.

Dr. Farhan Bhatti, the clinic’s CEO and medical director, said more people who previously did not have insurance are getting preventative services thanks to the “huge impact” of expanded Medicaid eligibility. Lyon said the earlier care helps residents avoid more expensive, chronic illnesses and trips to the emergency room.

“It’s worked as designed. It’s been a very successful program,” he said alongside officials representing hospitals, family physicians, businesses and the poor. “We’ll need to continue to work with the federal government as they look at modifying the statute statewide. But I think maintaining that access to care is our most important priority.”

In May, the nonpartisan Congressional Budget Office said of the 23 million more Americans who would become uninsured under House Republicans’ measure, more than half — 14 million — would come from the bill’s $834 billion in cuts to Medicaid over 10 years. The legislation would impose a per-capita cap on the overall federal share of Medicaid spending, meaning it would no longer be an open-ended entitlement, and also limit growth in federal spending.

The long-promised effort to overturn former President Barack Obama’s health law is in limbo in the Senate.

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