Michigan has submitted a take-it-or-leave-it request to alter the terms of its Medicaid expansion, and coverage for about 600,000 residents is at stake.
Under the proposed waiver, residents above the federal poverty level who have been enrolled in Medicaid for 48 months would have to buy a private plan through HealthCare.gov or see their cost-sharing obligations rise to 7% of their income. Under the current structure of the program, beneficiaries with incomes between 100% and 138% of the federal poverty level pay 3% to 5% of their income for premiums and cost-sharing.
The terms of the request are dictated by the 2013 state law that allowed that state to expand Medicaid under the Affordable Care Act. The law stipulated that the request had to be submitted by Sept. 1, 2015, and that the CMS must respond by December 2015. If the CMS rejects the waiver, the state must terminate its Medicaid expansion program, dubbed Healthy Michigan.
The Legislature gave little wiggle room for negotiation. The CMS has to either approve the language as it is, or something close to it to be in compliance with the legislation, according to Steve Fitton, who was Michigan's Medicaid director until June.
As the clock ticked down to submit the waiver, Fitten said, he was increasingly gloomy about the program's prospects. “On those days that I was in bad place, I would think the program would have to end,” said Fitton, who is now a principal at Health Management Associates.
Medicaid advocates and experts are concerned that even if the Obama administration wanted to go along with the terms, it's unclear if federal policy would permit it. Medicaid regulations dictate that cost-sharing must be “nominal” for the population, according to Joan Alker, executive director of the Georgetown Center for Children and Families.
A CMS spokesman said the agency's "priority will be to make sure that any waiver approval provides for coverage that is affordable and accessible for Michigan citizens."
Advocates are also concerned about the impact on coverage and care if the waiver is approved. Studies on the Medicaid population have shown that even small amounts of cost-sharing can discourage low-income individuals from seeking care and maintaining coverage.
“We have serious concerns that this (waiver) really contradicts the purpose of the Medicaid program, which is to make sure low-income people have access to affordable healthcare,” said Rachel Klein, director of organizational strategy at Families USA.
The impact, however, is likely to affect a relatively small sliver of beneficiaries. The income group the waiver targets excludes the vast majority of people who gained coverage under the the state's Medicaid expansion. It also applies only to people who have cumulatively been on Medicaid for four years, making the number of people potentially affected even smaller, according to Marianne Udow-Phillips, director of the Center for Healthcare Research and Transformation at the University of Michigan.
And people who are affected would have an opportunity to reduce the cost-sharing burden by complying with wellness activities like seeing a primary-care physician and getting preventive exams.
Udow-Phillips also noted that state officials have been negotiating the waiver request with the CMS for months. “This waiver will not come as a surprise to CMS,” she said. “It's likely this request includes things said in those conversations.”
Another positive omen is that Medicaid expansion has the support of Republican Gov. Rick Snyder.
“This governor doesn't play political games,” said John Truscott, a GOP consultant and president of the Truscott Rossman public relations firm in Lansing, Mich. “This waiver request represents a very genuine effort to continue expansion in the state.”