Medicaid Expansion in Michigan

By Bonnie Bochniak
Vice President, Government Relations
MBPA/MFBA

May 2013 – The Michigan House of Representatives is taking on the issue of Medicaid Expansion, but on their own terms. Medicaid Expansion is an option for each state to adopt; it is not a requirement, per the Affordable Care Act (ACA). Currently 22 states, including Washington D.C., will have Medicaid Expansion and 14 states thus far have rejected the opportunity.

Medicaid Expansion would amend the Social Welfare Act to allow nondisabled adults with an annual income level up to 133% of federal poverty guidelines to enroll in the medical assistance program (Medicaid). Expanding this coverage would include about 450,000 working adults into Michigan’s Medicaid system. The cost savings to Michigan in accepting this expansion is about $1.5 billion in federal funds being received by the state in fiscal year 2013-2014 and an estimated $206 million in general fund due to the 100% federal payment of certain costs currently being financed with state funds.

Michigan House legislators are looking to propose their own spin on the Medicaid Expansion, calling for Medicaid Reform in House Bill 4714. Their changes to the federal guidelines cap those receiving federal assistance to 48 months, require 100% funding by the federal government, and requires that nondisabled adults enrolled in Medicaid make contributions of up to 5% of their annual income in the form of copays, premiums, or an account for health care expenses.  

What this means for Michigan businesses is that some of their employees might qualify to receive health care through Medicaid, which depending on each company, can be very beneficial for the employer. The devil is in the details still, so much of this is currently being vetted out by legislators. This issue will see much more deliberation in the House and Senate.

We will continue to keep you up to date as more developments arise.  As always, please contact our Government Relations team with any questions. By phone: 888-277-6464 or by email: bbochniak@michbusiness.org. We value your feedback.