Michigan: State legislature moves to put lipstick on the Medicaid work requirement pig

Over the past year or so I've written numerous entries about Michigan Republicans pushing through an ineffective, inefficient, cruel and pointless work requirement addition to Michigan's implementation of Medicaid expansion under the Affordable Care Act, culminating in this one:

New work requirements for people in Michigan's Medicaid expansion group could cause as many as 183,000 people to lose their coverage.

Anywhere between 9 and 27 percent of the approximately 680,000 people enrolled in the Michigan Healthy Plan - or 61,000 to 183,000 recipients - could be kicked of the rolls.

That's up to three times what was estimated by the House Fiscal Agency when the work requirement bill was passed last year. The work requirements are scheduled to take effect on January 1, 2020.

Yesterday it was reported that three new bills have been introduced in the Michigan legislature--two of which have bipartisan support, interestingly--which will supposedly reduce the damage coming from the work requirement waiver: Senate Bill 362, Senate Bill 363 and House Bill 4522.

Both of the Senate bills have bipartisan support, with several of the 19 co-sponsors being Republican (Michgan's state Senate only has 38 members total). The list of 51 co-sponsors of the House bill, on the other hand, appear to all be Democrats.

As for what these bills would actually do, the changes in Senate Bill 362 include:

  • "A requirement that able-bodied recipients verifiy that they are meeting the workforce engagement requirements by the tenth of each month for the previous month's qualifying activities through MiBridges or any other subsequent system"

being changed to:

  • "A requirement that an able-bodied recipient verifies that he or she is meeting the workforce engagement requirements by the last day of each month for the previous month's qualifying activities through MiBridges or any other subsequent system."

Immediately after this is added:

  • "If a recipient does not verify that he or she is meeting the workforce engagement requirements by the last day of the month for the previous month, he or she may verify compliance with the workforce engagement requirements at a date after the missed date for reporting. If the recipient verifies compliance at a later date, the month is not a noncompliance month."

Basically, this gives Healthy Michigan enrollees 3 more weeks to verify compliance with the requirement each month, and also allows them to verify compliance retroactively later on if necessary in order to avoid being kicked off the program. Good.

Senate Bill 363 includes the same "able-bodied" wording cleanup, along with this additional exemption provision:

  • (f) an exemption from the reporting requirement if the department is able to verify the recipient's compliance through other data available to the department.

SB363 appears to allow the state to automatically exempt the enrollee from the work requirements whether or not the enrollee requests it. Again, good.

As an aside: MiBridges, which is how enrollees are supposed to verify compliance, is Michigan's state benefits management website. Even in 2019, not everyone has internet access, not everyone has a computer (or easy access to one via a library/etc), and of course websites have technical problems from time to time (even as I type this, there's a notice on the MiBridges home page stating that "MI Bridges users may experience limitations viewing documents, letters, and benefits Friday, June 7 from 7:00 - 7:15 p.m. We appreciate your patience and apologize for any inconvenience.")

I'm hoping that this bullet will also help with situations like that by allowing them to use other means of verifying compliance.

As for the House bill with only Democratic support, that's a bit more obscure. I found these changes:

  • "as recommended by the enrollee's prescribing provider and as is consistent with section 109h and sections 9701 to 9709 PART 97 of the public health code, 1978 PA 368, MCL 333.9701 to 333.9709."

  • "(11) By December 31, 2015, the department shall review and report to the legislature the feasibility of programs recommended by multiple national organizations that include, but are not limited to, the council of state governments, the national conference of state legislatures, and the American legislative exchange council, COUNCIL OF STATE GOVERNMENTS, THE NATIONAL CONFERENCE OF STATE LEGISLATURES, AND THE AMERICAN LEGISLATIVE EXCHANGE COUNCIL, on improving the cost-effectiveness of the medical assistance program.

I think these are just minor cleanups/update. THIS is the main point of the bill--this entire section would be eliminated:

  • (28) This section does not apply if either of the following occurs:
    • (a) If the department is unable to obtain either of the federal waivers requested in subsection (1) or (20).
    • (b) If federal government matching funds for the program described in this section are reduced below 100% and annual state savings and other nonfederal net savings associated with the implementation of that program are not sufficient to cover the reduced federal match. The department shall determine and the state budget office shall approve how annual state savings and other nonfederal net savings shall be calculated by June 1, 2014. By September 1, 2014, the calculations and methodology used to determine the state and other nonfederal net savings shall be submitted to the legislature. The calculation of annual state and other nonfederal net savings shall be published annually on January by the state budget office. If the annual state savings and other nonfederal net savings are not sufficient to cover the reduced federal match, medical coverage for individuals described in subsection (1)(a) shall remain in effect until the end of the fiscal year in which the calculation described in this subdivision is published by the state budget office.

OK, this gets a bit wonky, but basically, the way ACA Medicaid expansion payment works is as follows:

  • In 2014, 2015 and 2016, the federal government paid 100% of the cost for any state which expanded the program.
  • In 2017, this dropped to 95%, with the state having to pick up the other 5% of the tab.
  • The federal portion dropped to 94% in 2018, 93% this year and is set to stop at 90% for 2020 and beyond.

It sounds like the paragraph above was originally added to give Michigan an escape clause in case the ACA was altered to reduce the federal portion covered, to prevent the state from being left holding the bag if Congress changed it to 80%, or 60% or whatever.

To be honest, I'm a bit confused as to why it was worded this way in the first place, however...the "reduced below 100%" without any reference to the later percentage drops make it sound like Healthy Michigan was supposed to automatically terminate back in 2017. Of course, it also requires the state to not have "sufficient net savings" to cover the gap, which Michigan has had until now, which I guess is what's prevented the program from shutting down so far. So...again, this is a good bill.

Update: Emily Schwarzkopf notes that this language might just mean that if the cost to the state exceeds the savings, the program is shut down...which likely would indeed happen at some point if the federal match did ever fall below 90%.

The bad news is that none of these bills are likely to make more than a small dent in that estimated 183,000 people who are likely to lose coverage. This feels very much like nibbling-around-the-edges territory...which is likely the only reason why the Senate bills have GOP support at all.

The good news is that, as my friend and U of M Law Professor Samuel Bagenstos noted last month, Michigan Governor Gretchen Whitmer has the power to reduce the number of Michiganders who lose coverage by 70,000 or more:

...For now, Gov. Whitmer is stuck with the work requirement. But she does have room to implement it in a way that blunts its worst harms. Indeed, if she makes the right choices, she could protect 70,000 or more Michiganders from being thrown off the rolls by that requirement.

...To solve this problem, exemptions from Michigan’s new work requirement must, so far as possible, be determined automatically by state officials — without any need for application or certification by the individual beneficiaries.

...But the statute does not limit the automatic exemptions to those that it specifically enumerates. It provides that, when the Michigan Department of Health and Human Services implements the work requirement, the requirement “must include, but is not limited to,” the eligibility standards and exemptions listed in the legislation.

...The waiver itself provides the basis for further automatic exemptions. It requires Michigan, “[p]rior to implementation” of the work requirement, to “[e]nsure the state will assess areas within the state that experience high rates of unemployment, areas with limited economies and/or educational opportunities, and areas that lack public transportation.” The state must assess those areas “to determine whether there should be further exemptions” from the work requirement so that it “will not be unreasonably burdensome for beneficiaries to meet.”

That provision of the waiver — which, remember, was issued by the Trump Administrationgives Gov. Whitmer the basis for adding a new administrative exemption for Medicaid recipients in “areas with limited economies.” Such an exemption could substantially reduce the harm of the work requirement.

...If MDHHS were to administratively exempt individuals in these counties from the work requirement, the high-end estimate is that only about 109,000, instead of 183,000, people would be thrown off the rolls. That would still be a substantial harm, but it would potentially protect over 70,000 people from losing their Medicaid lifeline.

Whitmer was elected in large part on her promise to protect Healthy Michigan. Here's how she can keep that promise to the best of her ability.