State submits waiver request for expanded Medicaid

The state of Michigan submitted a waiver request to the federal government Tuesday in the hopes that it can continue health care coverage for nearly 600,000 low-income residents under its expanded Medicaid program.

In April, state officials said they worried the Obama administration might not grant a waiver on the health care cost-sharing requirements in its Medicaid expansion law — called the Healthy Michigan Plan. The state has been talking with the Centers for Medicare and Medicaid Services about the request and expects to restart discussions “in earnest” in the next two weeks now that the waiver has been officially submitted, said Nick Lyon, director of the Michigan Department of Health and Human Services.

“I’m optimistic” the waiver will be approved, Lyon told the News on Tuesday.

If the federal agency rejects Michigan’s request, the expanded Medicaid health program would end by April 30.

“With nearly 600,000 Michiganders receiving Healthy Michigan Plan benefits, this is a program that makes a real difference in people’s lives,” Gov. Rick Snyder said in a statement.

The Centers for Medicare and Medicaid Services — a part of the U.S. Department of Health and Human Services that oversees the federal Affordable Care Act — has until the end of the year to make its decision.

The program provides Medicaid health coverage to adults with incomes between 100 percent and 133 percent of the federal poverty level, or roughly $12,000 for one person.

Michigan wants to require its Medicaid customers to make a choice after 48 months on whether to purchase a policy on the health insurance exchange at HealthCare.gov, or start contributing up to 7 percent of their income to remain on the state’s Healthy Michigan Plan. Lawmakers adopted these requirements as part of the compromise Medicaid expansion legislation that squeaked through the Senate two years ago.

Federal officials have been concerned because the Affordable Care Act allows only those people without health insurance to purchase coverage through the health insurance exchange, said Michigan Medicaid Director Steve Fitton. Under Michigan’s law approved in August 2013, people could try to purchase coverage at HealthCare.gov while still insured by the Healthy Michigan Plan.

Another issue is the increase on the cost-sharing rate to 7 percent. The federal Medicaid center has capped cost-sharing at 5 percent in other states.

The Obama administration approved a waiver in December 2013 allowing Michigan to charge recipients from 3-5 percent of their income for coverage, depending on their earnings. A resident with an income of $12,000 annually would contribute 3 percent, or $240 annually.

“We certainly pushed the boundaries with our first waiver,” Lyon said.

“I think these (waiver) requests are unique,” he said. “They are something we just will need to work through. We will need to see what kind of middle ground there is.”

Republican state lawmakers insisted on the cost-sharing requirements because the federal government will gradually stop paying for all of the cost of the health coverage after 2017.

The Centers for Medicare and Medicaid Services has said it has a policy of not commenting on “waiver requests that are pending or under review.”

Marianne Udow-Phillips, director of the Center for Healthcare Research and Transformation at the University of Michigan, has said it’s in the Obama administration's interest to approve Michigan’s waiver request.

“If (Obama officials) don’t grant a little more flexibility that helps make the program work and the Michigan program falls apart, they just lost one of their shiny examples of success,” Lansing consultant John Truscott, who sometimes works on health care issues, told The News in April.