Senior Policy Analyst
Update, June 7: We’ve updated this post to reflect House passage of the bill.
The Michigan House has passed a revised version of a bill the Senate passed in April that would take Medicaid coverage away from people who don’t meet a work requirement. While the Senate and Governor Rick Snyder must still sign off on the revised bill, it retains the same core structure as the Senate version, which means it would have the same harmful impacts: large coverage losses and less access to care for low-income Michiganders, higher uncompensated care burdens for hospitals, and increased state administrative costs.
Not only that, the House-approved bill puts Michigan’s entire Medicaid expansion under the Affordable Care Act (ACA) — covering 670,000 people — at risk. That’s because Michigan would be required to end its expansion if the federal Centers for Medicare & Medicaid Services (CMS) doesn’t approve an additional waiver that raises premiums on some Medicaid beneficiaries.
The revised bill makes modest changes to the work requirement. It lowers the number of required work hours from 29 a week to 80 per month; gives enrollees a grace period in which they can fail to meet the work requirement for up to three months of the year and still retain their coverage; removes a rightly criticized provision that would make the requirement less rigid for people in mainly white, rural areas with high unemployment than people in mainly African American, urban areas with equally high unemployment; and exempts from the work requirement very low-income parents who have Medicaid coverage under the state’s eligibility rules from before it expanded Medicaid.
It also adds a harmful new provision raising premiums on beneficiaries with incomes above the poverty line (about $1,000 a month for an individual) — mostly working people in jobs that don’t offer health coverage. They now pay a monthly premium of 2 percent of their income, which is in line with what people with similar incomes pay for coverage in the ACA’s marketplaces in states that haven’t expanded Medicaid. The bill would more than double these premiums to 5 percent of income, or about $50 per month, for people who’ve had Medicaid coverage for more than 48 months — that is, to a level that’s likely unaffordable for many of these individuals. No state has been allowed to charge Medicaid beneficiaries premiums at that level.
Up to 54,000 Michiganders would lose their Medicaid coverage under the revised bill, the Michigan House Fiscal Agency estimates. And that estimate is likely too low. It excludes coverage losses among people subject to higher premiums as a result of the bill, and it apparently assumes that everyone who’s eligible for an exemption from work requirements will secure one when, in reality, many people will likely be stymied by red tape and paperwork.
Those at particular risk of losing coverage include:
We’ve shown that 46 percent of low-income workers nationwide who could be affected by Medicaid work requirements would fail to meet a 20-hour-per-week requirement at least one month during the year. Even among people working 20 hours a week on average over the course of the year (1,000 hours for the year), 1 in 4 don’t work 80 hours every month. Among people working in unstable jobs with volatile hours — in industries like retail, home health, and construction — many would fall short of the requirement for multiple months and so would still lose coverage under the revised bill, as would many workers in Michigan’s seasonal tourism industry.
Coverage losses would occur in all parts of the state. In fact, because the bill’s sponsors have removed the work requirement’s controversial exemption for mainly white, rural counties with high unemployment, the rigid requirement would now apply to more people. Every Michigan county except one has experienced a drop in its uninsured rate of at least 40 percent since the state expanded Medicaid in 2014, as we’ve shown, and under the revised bill all parts of the state would experience coverage losses.
These coverage losses will set back Michigan’s progress in improving access to care and health. In addition, the revised bill would lead to:
Michigan’s Medicaid expansion has produced large coverage gains, a sharp drop in the uncompensated care its hospitals provide, and savings to the state’s budget. If Governor Snyder signs this bill into law, these gains will erode.