Four Big Problems with Michigan’s Medicaid Waiver Legislation Aside from the Work Requirement

Today, the Michigan legislature passed a bill that imposes new work and premium requirements on its huge Medicaid expansion population. Families USA and other organizations have written extensively about how work requirements don’t belong in a health care program like Medicaid and how Michigan’s legislation is particularly poorly designed and punitive. But the version of the bill that just passed includes several other major problems. Even on its own terms, the bill is badly structured and takes irresponsible risks with the health care of almost 700,000 Michiganders. We urge Governor Snyder to veto it.

1. The Bill Gives the Trump Administration and Washington Bureaucrats the Power to Kill the Healthy Michigan Program: As of now, with the Affordable Care Act surviving in Congress, the only people who can take Healthy Michigan coverage away or Michiganders and their state officials. But the new bill gives the Federal government one year to approve Michigan’s waiver request or the Healthy Michigan program goes away, leaving all of its enrollees with no health insurance. Given the Trump administration’s open opposition to the Medicaid expansion, there are surely powerful people in Washington DC who would like nothing better than to simply sit on Michigan’s request and let the Healthy Michigan program die. This legislation gives those people in Washington that power.

2. The Bill Includes a Bizarrely Punitive Premium for Near-Poor Working People:People with incomes just over the poverty line come in for particularly harsh treatment in the bill. Anyone with an income between 100% and 138% of the poverty level for four years or more are forced to pay 5% of their income—far higher than any premium in Medicaid in any other state—or lose their coverage. This would create a strong incentive to REDUCE income to under the poverty line. This provision is so nonsensical, there is a good chance that the Trump administration would not approve it. But a disapproval would trigger the end of the Healthy Michigan program as described above.

3. The Bill Would Lock People Out of Coverage for a Year for Paperwork Discrepancies: The bill creates a broad mandate on Michigan Medicaid to take coverage away from people in the Healthy Michigan program for a year if they are found to have “misrepresented their compliance” in required monthly reporting of their work hours. Michigan Medicaid will be required to check enrollee filings against some sort of state database and errors in that database will lead to year-long disenrollments and lockouts.

4. The Bill Creates a Crazy, Rushed Timeline for the Snyder Administration to Write and Submit a Waiver: The Snyder administration is required to submit a waiver to the Trump administration by October 1, 2018.  But federal and state law require the waiver to be submitted for public and tribal consultation starting 60 days before federal submission—so no later than the end of July. That gives Michigan Medicaid just a few weeks to lay out their plans to implement this complex mess of a bill.