By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

 

June 2013 – In what many Lansing insiders are describing as one of the most bipartisan, herculean legislative accomplishments in recent memory, on June 13, 2013, the State House achieved what most naysayers considered impossible; passage of a Medicaid bill that would allow able-bodied adults 65 years old and younger with an annual income level up to 133% of the federal poverty level (FPL) to enroll in Medicaid.

 

What may not be obvious in that description; extending mandatory eligibility to this population was included in the Patient Protection and Affordable Care Act in 2010. The Supreme Court subsequently ruled that mandating states to expand Medicaid coverage was coercive and as such, expanding coverage became voluntary on a state by state basis.

 

With a Republican Governor and both legislative chambers controlled by conservatives, many Lansing pundits doomed the feasibility of passage from the start. But, with Governor Snyder enthusiastically supporting expansion early this year, in fact, assuming state savings into the Fiscal Year 2013-14 budget, the legislature was left in a conundrum. Until that is, some Republicans began framing the proposal as an opportunity for Medicaid reform, while also providing health insurance cost relief to individuals and to the business community by reducing the cost shift of uncompensated care. Heated debate has ensued in earnest over the last several weeks with legislators hearing impassioned pleas favoring both sides of the issue. However, the final version of House Bill 4714 managed to balance the necessary reforms Republicans needed while preserving the safety net for those most in need–a provision Democrats demanded. The following includes various highlights of House Bill 4714 as passed by the House on June 13, 2013:

 

• The Department of Community Health (DCH) shall seek a waiver from the U.S. Department of Health and Human Services (HHS) to do the following:

 

a) Enroll eligible individuals, who meet citizenship provisions into a contracted health plan that provides an account into which money from any source including the enrollee, the enrollee’s employer and public or private entities on the enrollee’s behalf, can be deposited to pay for health expenses.

 

b) Require enrollees with annual incomes between 100%-133% of FPL to contribute not more than 5% of income for cost-sharing requirements. (5% contribution does not apply for first 6 months of enrollment).

 

c) Incentivize healthy behaviors by reducing cost sharing requirements, i.e., participation in a risk assessment to identify unhealthy characteristics like alcohol and tobacco use, obesity, and immunization status.

 

d) Develop incentives for enrollees who assist DCH in detecting fraud and abuse in the Medicaid program.

 

e) The creation of a targeted assessment related to employability, which shall promote employment related services and job training available to lower caseloads by assisting able-bodied unemployed adults into the workforce.

 

f) Requires the Department of Insurance and Financial Services to examine financial reports of health insurers and evaluate the impact expanding coverage has had on rates. The findings shall be considered in the annual approval of rates.

 

g) DCH shall explore and develop a range of innovations and initiatives to improve the effectiveness of the program and lower healthcare costs.

 

h) A medical waiver allowing Michigan’s expansion proposal (as explained within the confines of HB 4714) must be approved by HHS by December 31, 2015. If the waiver is not approved, expanded medical coverage will no longer be available. In addition, the waiver must allow individuals (between 100% to 133% of FPL) who have exceeded 48 cumulative months of coverage to chose to either purchase private insurance through an exchange OR remain in Medicaid, but increase cost-sharing requirements up to 7% of income. In addition, the bill requires HHS to make a determination on approval of Michigan’s proposed waivers by December 31, 2013. If the waivers are rejected, Medicaid expansion is dead.

 

The bill now awaits Senate action where it is expected to face continued resistance from the majority party. Will the bipartisanship experienced in the House carry over to the Senate and ultimately send the bill to the Governor’s desk? Time will soon tell.

 

Date written: June 17, 2013
 

By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

 

March 2013 – The Patient Protection and Affordable Care Act (ACA) has been the elephant in the room, consuming all of the air, attention, and to some extent fear, amongst Michigan legislators for the last 12 months. Thousands of hours have been dedicated to reviewing, evaluating and determining how, or IF the state would implement the myriad of provisions included in the Act. The debate continues to rage within the halls of the Capitol as Michigan legislators contend with the latest controversial provision of the ACA: expanding Medicaid eligibility.

 

Although most of the ACA was upheld by the Supreme Court last June, expanding Medicaid eligibility from the current 40 percent of the federal poverty limit to 133 percent was a provision ruled unconstitutional by the Supreme Court. Despite that ruling, Governor Rick Snyder included the expansion in his Fiscal Year 2013-2014 budget presented in February, and ever since, Michigan legislators, particularly Republicans, have been left questioning how to tackle the political conundrum.  

 

The ACA requires increased “shared responsibility” payments to help provide health care costs to those who do not have health insurance. If adopted, the expansion could provide health insurance to an estimated 400,000 additional Michiganders. At the crux of the issue: dollars and cents. The federal government has promised to cover 100 percent of the expense of the expansion for the first three years (if passed, the change would become effective January 1, 2014). However, by 2020, Michigan would be responsible for funding 10 percent of the costs, which has some legislators cautioning warning ahead.  Despite the eventual expense to the state, Governor Snyder believes the state would accrue significant savings by reducing expenditures in state programs currently providing services to this uninsured segment of society. Half of those accrued early savings would be dedicated to a fund that would help defray the costs of the expansion in the later years. The Administration believes the fund would cover expenses until Fiscal Year 2034-35, thus defraying costs for 20 years. As such, the Governor purports the investment is well worth a little legislative indigestion over a politically unpopular federal mandate.

 

The legislature has yet to act on the expansion and with increasing opposition from conservative and Tea Party interests, the proposal pits the Republican administration against Republican majorities in both the State House and Senate. It’s a political hot potato that has many political observers, small businesses and health advocates anxiously awaiting a decision in the latest controversy surrounding the ACA.

By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

December 2012 – After a long, expensive and exhausting election season, the legislature finally returns to Lansing for the final weeks of the 96th legislature. In what is expected to be an exceptionally busy and aggressive agenda, members of the Michigan State House and Senate are expected to tackle a number of significant public policy decisions before all bills introduced in the 2011-2012 legislative cycle “die” and must be re-introduced in 2013 for consideration.

Senate Bill 1359 remains among the myriad of bills awaiting potential deliberation. The content of the legislation may be familiar to some — the bill proposes to amend the ‘Health Insurance Claims Assessment Act’ which became law in 2011, but did not take effect until January of 2012. The current legislation assesses a 1.0% tax on the “paid claims” of insurance carriers, third party administrators and self-insured entities that pay health insurance claims on health services provided in Michigan to Michigan residents. The “claims tax” was introduced as a means of preserving Medicaid dollars. The tax was intended to raise roughly $400 million annually and would help Michigan leverage or “draw down” additional federal Medicaid matching dollars. Over the last 10 months, however, the tax has not been generating the amount of revenue the state needs to adequately meet expectations regarding Medicaid funding — hence, the introduction of SB 1359.

The bill would allow the Department of Treasury the authority to increase or decrease the rate of the tax to meet the “base need.” The base need in 2012 is $400 million as stated previously, but for 2013 and each year thereafter, the base need would be calculated by the immediately preceding year’s base need adjusted by the medical inflation rate. The bill effectively allows the department to raise the rate, as appropriate, if revenues are not meeting “need.” The original legislation also established a mechanism for a proportional credit against the carrier or third party administrator’s assessment (in the immediately preceding year) if the revenue collected exceeded $400 million. This provision is no longer included in SB 1359.  

The Michigan Business and Professional Association and the Michigan Food and Beverage Association have joined a coalition of business interests across the state to oppose SB 1359. The Associations will continue to apprise members of developments regarding this important piece of legislation.

 

By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

November 2012 – The Affordable Care Act (ACA) is a massive, complicated and what feels like all-encompassing piece of legislation that continues to confound most Americans. Academics, bureaucrats and small business owners all continue to analyze the implications of the bill while determining how best to adapt to the changes.  One central theme of the ACA that many small business owners are reviewing is the various provisions that encourage employers to develop preventive care and wellness programs for their employees.

Wellness programs may include gym memberships, smoking cessation programs, nutrition and diet counseling, diabetes prevention strategies and more. The initiatives are intended to encourage employees to adopt healthier lifestyle choices. Employers have a lot at stake; the Centers for Disease Control and Prevention have estimated that productivity losses related to personal and family health problems cost U.S. employers an estimated $1,685 per employee per year. It’s a staggering figure if considered cumulatively — $225.8 billion annually.

So, how does the ACA propose to help the plight of the small business owner — $200 million over the course of five years to start. The ACA includes a section that provides grants for small businesses that, as of enactment of the act, were not offering comprehensive workplace wellness programs. The ACA defines “eligible employer” as an employer with less than 100 employees who work 25 hours or more per week. The act also specifies that wellness programs should be grounded in evidence-based research and best practices and should include the following components:

A)    Health awareness initiatives, including health education, preventive screenings, and health risk assessments;

B)    Efforts to maximize employee engagement including mechanisms to encourage employee participation;

C)    Initiatives to change unhealthy behaviors and lifestyle choices; efforts could include counseling, online programs and self-help materials;

D)    Supportive environment efforts including workplace policies to encourage healthy lifestyles, healthy eating, increased physical activity and improved mental health.

 The ACA also increases the incentives that may be made available to wellness program participants. Currently, employers are allowed to provide a financial reward of up to 20 percent of the costs of coverage for employees who participate in wellness programs and satisfy a standard related to health status. After January 1, 2014, employers will be allowed to discount 30 percent of the cost of individual or family health care premiums. That amount could rise to as high as 50 percent if the Secretaries of Health and Human Services, Labor and Treasury approve of the change.

As with all things surrounding the ACA, remaining apprised of changes or the issuance of new policy guidelines is important. The scope of the act and the potential implications on your business warrants close monitoring.