The passage of Medicaid expansion allows the state to take advantage of extra federal funding available under the Affordable Care Act to cover low-income people. Although the Michigan Senate voted to approve Medicaid expansion, there's a catch. The bill will not take effect until April 1, 2014. This could change after the Michigan legislature comes back in September, if two-thirds of the Senate can agree that it should take effect immediately (meaning on January 1, 2014). If the the legislature fails to pass the bill by a two-thirds majority, the state will have to forgo an estimated $7 million per day in federal funds that would have covered health care for this low-income population.
The effect of Medicaid expansion on adults with developmental disabilities will not be as great as the effect on people with mental illness, although low-income families with disabled children would be likely to benefit from Medicaid expansion. The vast majority of adults with developmental disabilities already meet the eligibility criteria for Medicaid, but many people with mental illness who can work, at least sporadically, have a harder time qualifying. Medicaid expansion will provide Medicaid to mentally ill people who meet the income criteria and also make them eligible for Medicaid-funded mental health services. It should also have a significant impact on low-wage caregivers who do not currently have health insurance.
One reason the bill won enough Republican support to pass was offered by State Senator Kahn: “This bill is about reform. It is a national model,” Kahn said. “The taxes in the Affordable Care Act are billions of dollars. And for us in Michigan, it will be $2 billion siphoned from our people, and we’re going to bring that back to the state.”
Here is addtional information on Medicaid expansion, according to the Detroit Free Press:
- Federally-funded Medicaid expansion will cover 320,000 low-income Michiganders next year and 470,000 people by 2020.
- "The bill requires the additional recipients [of Medicaid] to contribute 5% of their out-of-pocket medical costs. After 48 months, that co-pay would increase to 7% or the recipient could purchase insurance on the health care exchange...if a person who falls in that poverty level is determined to be “medically frail” — either with a chronic disease, mental illness or are unable to complete the daily tasks of life — they would remain at the 5% co-pay."
- The federal government will have to grant waivers to Michigan for two of the provisions of the bill, the creation of health savings accounts for Medicaid recipients and language that allows recipients to choose between a health care exchange or Medicaid benefits after 48 months.
- The Medicaid expansion will be fully paid for by the federal government through 2017. The federal contribution would drop to 90% by 2020.