Uncertain future of Affordable Care Act poses questions for Michigan Medicaid

Thursday, January 19, 2017 - 7:02pm

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Michelle Phillips

With both the United States' House of Representatives and Senate voting to approve budget resolutions last week in the first step toward repealing President Barack Obama’s health care law, the future of health care — particularly Michigan’s unique Healthy Michigan Medicaid Plan — is uncertain.

The Healthy Michigan Plan made available in 2014 uses funding through the health care law or “Obamacare,” as it is commonly referred to, to expand Medicaid coverage to adults with incomes at 133 percent of the federal poverty level, or about $16,000 per year.

A recent study conducted by University of Michigan lead researchers John Ayanian and health economist Helen Levy concluded Michigan’s Medicaid expansion will leave the state with more money than it actually spends on the program until 2021.

Ayanian, director of the UM Institute for Healthcare Policy and Innovation, said the goal of the study was to evaluate the broader economic effect of the Healthy Michigan Plan, such as additional employment and economic activity.

“As of January 2017, the state is responsible for covering five percent of the health care costs, and that will go up to 10 percent in 2020,” Ayanian said. “For 2017, Michigan is getting about $3.4 billion in federal funding for the Healthy Michigan Plan, so we wanted to estimate what effect that has on employment, personal income and state tax revenues as those dollars come in.”

The study concluded that in addition to over 600,000 low-income adult enrollees, 30,000 new jobs and an additional $2.3 billion of economic activity will be generated in Michigan as a result of the plan.

“We found that from 2015 through 2021 we estimate this funding is adding over 30,000 jobs to the state economy each year — about a third of them are in health care and 85 percent in the private sector, so that generates additional income and sales tax revenue,” Ayanian said.

Ayanian said the Healthy Michigan Plan included features not part of typical Medicaid programs, including the caveat that people over the poverty level were required to contribute two percent of their income toward their coverage, as well as financial incentives for patients to make healthy lifestyle changes, such as eliminating smoking and changing eating habits.

“When the Michigan legislature approved the Healthy Michigan plan in the fall of 2013, they created certain features that are not typically part of Medicaid coverage,” Ayanian said.

Gov. Rick Snyder dedicated a portion of his State of the State address on Tuesday to speaking about the benefits of Healthy Michigan and said he believes the plan has been successful in providing access to health care for many of the Michigan’s most impoverished citizens.

“We have 640,000 Michiganders in this program,” Snyder said. “It has provided over 2.8 million primary care visits, over 400,000 preventative care visits and it’s saving us money.”

Snyder also said he anticipates forthcoming changes to health care and would like to see Healthy Michigan serve as a model policy for the rest of the country.

“There’s going to be changes in health care,” he said. “The important thing is we need to let them know that Healthy Michigan is a model that can work for the rest of the country. We look forward to reimagining health care for all Michiganders and our entire country with Michigan being a leader in that dialogue.”

President-elect Donald Trump ran on a platform of repealing and replacing “Obamacare” amid problems of nationally rising costs in insurance premiums and prescription drugs.

Congressional Republicans have yet to introduce a comprehensive replacement plan, but it is speculated that Rep. Tom Price (R–Ga.), Trump’s pick to head the Department of Health and Human Services, could be influential in future health care policy decisions.

Price is a notable opponent of the Affordable Care Act and as a representative, he introduced the Empowering Patients First Act in 2015 as an alternative to “Obamacare.” Under Price’s plan, individuals would receive age-adjusted tax credits when purchasing insurance and the plan would allow insurers to sell policies across state lines in an effort to drive down costs by making insurance more competitive.

LSA junior Collin Kelly, chair of the University’s chapter of College Democrats, is a proponent of Obama’s health care law and said there are benefits for college students such as himself being able to stay on his parents’ health care plan.

“It has so many provisions that are so helpful, especially for people like me,” Kelly said. “Staying on my parent’s insurance until I’m 26 is huge; I wouldn’t be able to afford it if that wasn’t the case.”

In an ideal world, Kelly said he would like to see “Obamacare” amended and the country move toward a single-payer health care system, in which the state covers health care costs.

“It just gets down to certain values you feel, that like people’s health should almost be a right and shouldn’t be some privilege where if you’re born into poverty or born in certain communities just by chance you can’t take care of your health,” Kelly said.

Kelly said he believes the Affordable Care Act has been a success and he hopes Congress will reconsider keeping it in place, or at the very least replace it with a plan similar to “Obamacare.”

“Hopefully there’s enough pressure on that they keep it, because seven years in, it’s working and it’s now a part of not just our health care system, but our economy and government and it’s a part of people’s lives,” Kelly said. “We can’t just get rid of that with no solid replacement.”

The inside of the State Capitol building in Lansing, Michigan.

The inside of the State Capitol building in Lansing, Michigan. Buy this photo
Carolyn Gearig/Daily

Engineering freshman Lincoln Merill, publicity chair of College Republicans, said in an email interview with the Daily he believes the Affordable Care Act should be repealed and replaced with a better system.

"It needs to be repealed, but at the same time it also needs to be replaced with an improved healthcare system that allows greater competition and therefore drives down prices for everyone," Merrill wrote.

According to Merrill, the faults of the health care act as it stands is the lack of competition within the health insurance industry. 

"Some companies didn't want to have to cover some people and so they dropped out of the program altogether. Because there are so few companies left, prices are rising at alarming rates due to the low competition - as high as over 100 percent in Arizona," Merrill wrote. "These high costs and high deductibles, coupled with the lie of 'if you like your doctor, you can keep your doctor,' which is false because so many companies won't insure people, created a healthcare system with a good intention, that is providing health insurance for everyone, but critically flawed in execution."