Healthy Michigan Plan Awarded Waiver from CMS

By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

Jan. 30, 2014  – After a tumultuous eight-month battle in the legislature, the final piece of the puzzle finally came to fruition on December 30, 2013 when the federal Centers for Medicare and Medicaid (CMS) approved Michigan’s request for a waiver expanding Medicaid coverage. The approval from CMS will now cover an additional 320,000 Michiganders with health insurance through the “Healthy Michigan Plan.” In total, it is estimated an additional 470,000 Michigan residents will be covered by health insurance by 2021, as a result of the new plan.

Under the Healthy Michigan Plan, expanded coverage will now include residents making 133% of the Federal Poverty Level (about $30,000 per year for a family of four). Expanding Medicaid was the hardest legislative hurdle the Snyder Administration tackled this year, but many Lansing insiders also believe it is the most significant legislative achievement in decades because of the broad impact it will have on so many Michigan lives. Federal funds will cover 100% of the cost of the expansion from 2014 to 2016. That amount will drop to 95% in 2017, 94% in 2018, 93% in 2019 and 90% in 2020 where it will ultimately remain for subsequent years.

The Michigan Department of Community Health estimates the state will save around $320 million in uncompensated care costs by 2022. In 2014, an estimated $206 million in General Fund savings are expected to be realized; $103 million of that amount will be deposited into a health savings fund that will accrue interest over time to help cover the state’s portion of the expansion in future years.

Although proponents and opponents defended their position with equal amounts of passion, most of the business community embraced the bill, citing the potential savings in uncompensated care – an expense all taxpayers are exposed to. The Act takes effect April 1, 2014.