Tuesday, August 6, 2013

Michigan Medicaid Reform Proposals before the State Senate

This is from the August 2013 newsletter, The Advocate, from The Area Agency on Aging 1-B. AAA 1-B is a nonprofit agency serving the needs of older adults in Livingston, Macomb, Monroe, Oakland, St. Clair, and Washtenaw counties. 


Three Medicaid Reform Proposals Move to Full Senate for Consideration, Vote Likely in Early September  

On July 24th, the Senate Medicaid workgroup convened by Majority Leader Randy Richardville (R-Monroe) and led by Senator Roger Kahn, M.D. reported three Medicaid reform proposals; HB 4714 as passed by the House on June 13 with minor changes, SB 422 (Caswell) known as the Michigan Low-Income Health Plan Act, and Senate Bills 459 and 460 (Colbeck) known collectively as the Patient-Centered Care Act. All three bills were sent to the Senate Government Operations Committee and were voted out of committee on July 31st to be sent to the Senate for full consideration, debate and a likely vote will happen in early September.

The decision to move all three Medicaid proposals out of committee for a full senate vote was made by Senate Leader and Government Operations Committee Chair Randy Richardville citing that all three bills have their own merits. Supporters of HB 4714 worry the additional proposals may strip potential votes in favor of SB 422, or 459 and 460.

HB 4714 (S-7): The Healthy Michigan Plan reforms Medicaid to cover individuals with incomes up to 133% of the federal poverty level for up to 48 months with a requirement that the newly insured would pay no more than 5% of their out-of-pocket medical expenses. Following the 48 month period, the newly insured could then remain on Medicaid with an increase in their copayments up to 7% or they could choose to purchase health coverage through the Federal Health Care Exchange.

SB 422: The Michigan Low-Income Health Plan Act would essentially create a state funded alternative to Medicaid. The Act would provide tax credits to those between 133% and 100% of Federal Poverty Level (FPL) to enable the purchase of insurance on the healthcare exchange established by the Affordable Care Act. This bill establishes a Michigan Low-Income Health Plan which would provide health coverage to persons who meet the following criteria; Not eligible for Medicare, Medicaid, or MIChild; Household in-come under 100% of FPL; Under age 65; Not eligible for veterans health benefits; and have no other health insurance coverage.

SB 459, 460: The Patient-Centered Care Act would require the state to license private health exchanges, create the Low-Income Trust Fund, and “migrate” Medicaid recipients to individual health savings accounts from which they could purchase a qualified health plan. The Low-Income Trust Fund would be used to fund the deductibles of former Medicaid or MIChild recipients until the balance of their health savings account is adequate to pay their deductibles.

HB 4714 S-7 closely mirrors the version passed by the house in June and is likely to draw the majority of bipartisan support. Both alternative plans SB 422 and SB 459, 460 are receiving criticism as too costly to the State’s general fund, or as unfeasible given the knowledge and personnel requirements needed to administer the program.

Contact your Senator to share your opinion on reforming Medicaid in Michigan

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