News Story

Medicaid Expansion...What's the Rush?

Gov. Snyder applying serious pressure to get Michigan Senate to approve key Obamacare provision

Gov. Rick Snyder wants Medicaid expansion and he wants it now. Actually, he wanted it done a week ago, but he didn't get it.

The rush to expand began when — at the urging of the Snyder administration — the House Michigan Competitiveness Committee changed House Bill 4714 to a version House Democrats would support.

Speaker Jase Bolger, R-Marshall, allowed the bill to be passed with 48 Democrats supplying the bulk of the "yes" votes. Twenty-eight House Republicans also voted "yes" on Obamacare's Medicaid expansion. 

After the bill was sent to the Senate, the pressure to hurry intensified. But, last week, Senate Majority Leader Randy Richardville, R-Monroe, refused to move the legislation without the support of a majority of his Senate Republican colleagues.

Gov. Snyder's response was to question Sen. Richardville's leadership qualities and keep pressing for quick passage. He began a campaign-style tour of the state, touting the expansion. And he quit calling the key Obamacare provision Medicaid expansion, instead referring to it as "Healthy Michigan."

In spite of the push to quickly pass the legislation, the Oct. 1 fiscal year deadline is still nearly three months away. It appears that many Senate Republicans are asking some probing questions about the expansion. Among the questions is: Why the big rush?

Getting states to do the expansion is critically important to the Obama administration. It's so important that the Obama administration is offering hundreds of millions of up front federal dollars as an enticement to get states to expand Medicaid. States that take the deal will have to eventually pay 10 percent of the costs if the federal government holds true to its payment promises.

"I think it's important to find out whether the reforms in the House proposal would even be accepted by the federal government," said Sen. John Moolenaar, R- Midland. "All along, important aspects of this issue have been subject to getting information from the federal government.

"There are also numbers, such as the effect all of this is having on insurance premiums, that would be good for us to take a look at," Sen. Moolenaar continued. "That kind of information can help us make a more informed decision. Having more information is always better than having less."

Sen. Moolenaar said he is troubled by the idea of moving quickly on a complex issue, such as Medicaid expansion, which has major long-term state implications.

"There are just so many unknown variables involved with this issue," he said. "I think it's very important that we get this right. That's the real issue here. We need to get this right, not get it fast.

“The way Obamacare works, states can opt in at any time, but once you're in, there's no backing out," Sen. Moolenaar said. "We wouldn't necessarily need to opt in this year. The federal government has agreed to pay 100 percent the first three years. Yes, if we don't opt in this year, we'd forgo the federal dollars for that first year, but if we decided to opt in next year, we'd start getting the money then. This is not a now-or-never situation."

One key argument Sen. Moolenaar said he has heard for quick passage doesn't make sense to him.

"I keep hearing that the governor has to have the law in place in order to have more time to ask the HHS (Federal Health and Human Services department) about waivers for the reforms," Sen. Moolenaar said. "My understanding is that we already have other waivers in place with HHS without having passed a law. So I don't know why the [Michigan] Department of Community Health (DCH) would need to get the law passed ahead of time in order to pursue the waivers."

Sen. Patrick Colbeck, R-Canton, said lawmakers should be armed with as much information as possible and that won't be the case if they hurry.

"I'd say that doing this right away would be premature," Sen. Colbeck said. "There is information we'll have later that we don't have now, such as what all of this is doing to insurance premium rates and, with Obamacare, there are continuing developments, such as who will or won't be in this.

"We're looking at an issue that involves future generations," Sen. Colbeck added. "This is something we need to get right. That's what we should be looking at, not just what seems to be convenient at the moment."

Additionally, Sen. Colbeck said rushing to move a bill could result in missed opportunities.

"I think there is a huge opportunity here we might be missing," Sen. Colbeck said. "Instead of just putting a Band-Aid on this program by doing the expansion, we should be taking a serious look at how best to deliver quality health care.

"Does this really have to be a government solution?" he said. "If we hurry up with this, we could be missing opportunities to find some market-based solutions."

Gov. Snyder's office, which has begun calling Medicaid expansion, "Healthy Michigan," said expansion needs to happen now because of the time it will take to get waivers from the federal government. Sara Wurfel, a spokeswoman for Gov. Snyder, said that would take a minimum of 120 days.

"Michigan has a key chance to act on the Healthy Michigan plan and cushion the blow of the Affordable Care Act (ACA), a law that will have costly impacts on our residents, businesses and health providers otherwise," Wurfel said. "Choosing not to act will not stop the ACA from impacting our state, and many of those costs hit home on Jan. 1, 2014, costing Michigan as much as $1.1 to $1.2 billion per year. 

"Healthy Michigan does not comply with the traditional Medicaid rules that the ACA envisioned expanding, which is why this is a Michigan solution designed by Michigan policy makers for Michiganders," Wurfel continued. 

She said work also would have to be done and changes made to Michigan’s information technology system to determine who will be enrolled in "Healthy Michigan."

"A delay in approval will set back development time by at least a month," Wurfel said. "Further HMO capacity, contracts and system changes add another reason for quick action.

"The Department of Community Health needs to make contract changes to account for Healthy Michigan reforms, and private HMOs need time to work with provider networks to ensure adequate capacity for those enrolled, plus make changes to their IT systems to implement the reforms," Wurfel continued. "Finally, before Healthy Michigan takes effect, an effort has to be made to educate providers and consumers about changes in the law and to enroll individuals in the program."

The Mackinac Center for Public Policy, a free market research and educational institute, as well as some conservative groups, have cautioned lawmakers against expanding Medicaid. A primary concern is that once any form of the expansion is in place, state officials would find themselves at the mercy of the federal bureaucracy.

(Editor's note: This story has been updated with a response from Gov. Snyder's office, which was received days after the story was originally posted.)

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.