On March 11 the Michigan Health and Hospital Association released their annual report, which paints a grim picture of the current financial state of many Michigan health-care facilities. According to the report, hospitals in Michigan spent an excess of $1.8 billion on health care for patients who were unable to pay for these services in 2011. Of these expenses, $868 million were incurred as a result of unreimbursed Medicare and Medicaid services. To address these massive fiscal shortfalls, the report calls on Michigan politicians to expand Medicaid coverage and implement a health insurance exchange under the Affordable Care and Patient Protection Act. From both a financial and social standpoint, Michigan needs to adopt these expansion policies in order to be a national leader in accessible and high quality health care.
Nationwide, the standard of health-care coverage is changing. Despite a federal commitment to more extensive coverage under the ACA, individual hospitals currently assume responsibility for the care of millions of Americans through charitable services. While Michigan’s hospitals remain dedicated to providing assistance regardless of income, trade associations like the MHA continue to assert that the underfunding of these services detracts from their main goal: to provide quality care to improve the standards of living of not just individuals, but also communities.
Currently, 1.2 million Michigan residents are uninsured. As proposed, the Medicaid expansion would provide health care to an estimated 450,000 additional Michigan adults. Much of the aid provided to uninsured patients is through emergency room services and other non-proactive health care solutions that are more expensive and less effective than periodic care. Estimates from both the Republican-led House and Senate Fiscal Agencies project that the state will save $1 billion over a decade as the federal government’s assistance covers these costs in addition to the $2 billion annual federal funds for the expansion.
Some Republican lawmakers and opponents of the ACA are concerned about the long-term costs associated with the program, arguing that Michigan will eventually be financially responsible for a percentage of the proposed expansion. After three years, 10 percent of expansion costs are to be covered by the state, while the other 90 percent will continue to be federally funded. From both an economic and social perspective, however, the costs of not implementing a Medicaid expansion far outweigh the costs of those future payments. As health care is Michigan’s leading employer in the private sector, the deterioration of this critical component of the job market could have devastating effects for a state economy already in a slow recovery.
Expanding Medicaid coverage in Michigan under the ACA will have significant financial and social benefits for Michigan hospitals, residents and communities as well. Ultimately, however, improvements in community health can’t be achieved solely through retroactive treatment. A responsible policy toward health care will place equal emphasis on both sides of health care: the proactive measures and the reactive measures. State politicians must step up to help Michigan strengthen its position as a national leader in the health care industry and expand Medicaid coverage.