- Several states have begun expanding their Medicaid program at the ballot (including some more conservative states that initially opposed the program)
- In spite of language that would terminate Michigan’s Medicaid expansion if the program creates any net cost for the state, the Healthy Michigan Plan continues to rack up savings and successes for Michiganders
- Perhaps due to demonstrated success and wide public support, the Affordable Care Act’s Medicaid expansion is enjoying wider bipartisan support today than when the ACA was first passed
After an election cycle with numerous consequential ballot questions, the state is now contending with implementation of voter-approved laws (for instance, despite some policy flaws, marijuana became legal in Michigan today). At the same time, the legislature has made substantial amendments to paid sick time and minimum wage laws (that never made it to the ballot) and is tackling a host of other issues subject to popular and political contention. Yet, the focus on this lame duck partisan rancor belies an increasingly bipartisan national winner at the November polls: Medicaid expansion.
Three states—Utah, Idaho, and Nebraska—each expanded Medicaid via ballot initiative in November, adding to the growing list of states coming on board with this key component of the Affordable Care Act (ACA).
In Maine, where term-limited Governor Paul LePage vetoed Medicaid expansion five times (and has since held up implementation after voters expanded Medicaid at the ballot last year), Governor-elect Janet Mills has indicated she will move forward implementing Medicaid expansion once she takes office. This brings the number of states that have expanded their Medicaid programs to 37, with the baker’s dozen of holdout states clustered in the Deep South.
The forecast was not universally sunny for Medicaid’s proponents. Montana’s Medicaid expansion is set to sunset June 30, 2019 without legislative action to extend the program (after a ballot question to fund it from tobacco tax revenues failed) and Alaska’s Governor-elect, Mike Dunleavy, has been a critic of Medicaid expansion. Yet, both Wisconsin and Kansas (where a previous expansion of Medicaid was vetoed) have elected governors who are amenable to this policy change. Only time will tell how these changing priorities among state leaders translate (or don’t) into concrete policy actions.
Where does Michigan’s expansion of Medicaid—the Healthy Michigan Plan—stand upon these shifting sands of health policy?
Last year, our research found that the Healthy Michigan Plan was beneficial to all Michiganders, whether or not they use the program directly. The Healthy Michigan Plan has proven to be a cost-effective (and cost-constrained) method of providing high-quality health insurance to a population that would otherwise lack access to insurance coverage and many health care services. It provides access to care for more than 650,000 residents, lowers healthcare costs for others, reduces uncompensated care in hospitals, and bolsters rural health providers, all of which have led to wide-reaching economic benefits for the state; it has improved measures of healthcare cost, access, and quality, and is improving the physical, mental, and financial well-being of program beneficiaries.
Despite these benefits, we identified an ill-conceived mechanism in the law that would cause the program to sunset if its net cost to the state exceeded $0. While cost-benefit analysis is a classic tool of policy analysis and program evaluation, the type of narrow framework used for the Healthy Michigan Plan is based purely on state net-savings vs costs, and ignores numerous dimensions of program benefits. For instance, cost-benefit evaluations might consider that Medicaid spending (like other public investments) has a multiplier effect, and program investment generates macroeconomic stimuli, leading to increases in employment, personal income, and state revenue. A purely economic analysis also entirely ignores the tremendous social and health-related benefits of the program (that might be judged as worthy of some degree of state expenditure).
Nonetheless, we are still discussing the Healthy Michigan Plan because, so far, the program has been provided to the public at no net cost to the state: state savings and other non-federal savings associated with the program have exceeded costs each year since implementation of the program began. New estimates from the House Fiscal Agency anticipate that savings will continue to exceed costs for at least the next 10 years. The new, higher savings estimates are largely due to the Insurance Provider Assessment that replaced the much-maligned Health Insurance Claims Assessment (HICA) earlier this year. (You can read the Research Council’s past discussion of the many HICA hiccups here.)
With no immediate danger of an automatic, cost-based trigger terminating the program, with the failure of Congress to repeal the ACA, and with a Michigan governor-elect who has been a vocal proponent of Medicaid expansion, many of the existential threats to the Healthy Michigan Plan have dissipated. This is good news for those who depend on it for insurance coverage, as well as all other state residents who reap indirect benefits from its existence.
To be sure, nothing is certain in public policy. On one hand, the long-term impact of work requirements added to the program earlier this year will need to be observed and measured, particularly if they begin to imperil health. On the other hand, Michigan’s iteration of Medicaid is highly innovative. Rather than passively paying for health care services, it works to actively address underlying factors and environments that contribute to poor health and empower people to adopt healthier behaviors. In particular, Michigan’s State Innovation Model (SIM) is creating greater focus on population health through a community-based structure; this model is the foundation for potential transformations of health care payment and delivery in Michigan. Medicaid is likely to be a key component—if not the driving force—in future health care reforms that affect us all.
Michigan is fortunate to have such a highly successful program, and Medicaid expansion will likely continue to stand out as one of Governor Rick Snyder’s greatest gubernatorial achievements (as well as being a legislative achievement for leaders from both parties, such as future Senate majority leader Shirkey and Governor-elect Whitmer). Perhaps this overwhelming success is part of the reason for the growing bipartisan support we’re now seeing for Medicaid expansion. One can only hope the state’s new crop of political leaders will be able to work together to continue to bolster Michigan’s Medicaid program with future bipartisan innovations. For our part, the Citizens Research Council stands ready with non-partisan facts to aid in this process.