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When the state debuted its Healthy Michigan Plan it estimated 470,000 would eventually enroll, a number it's now surpassed.
(File Photo)
LANSING, MI -- Michigan's popular Medicaid expansion program will face an uncertain future if the U.S. Supreme Court strikes down a key plank of the Affordable Care Act this month.
A case before the nation's highest court seeks to invalidate premium tax credits that more than 225,000 Michigan residents have used to purchase private health insurance through a federal exchange.
Those same tax credits are featured in a pending waiver the state must win from the Obama administration in order to continue Healthy Michigan, a federally-funded Medicaid expansion program that has enrolled roughly 600,000 low-income residents since implementation but could be rolled back in 2016.
"I think Michigan is in a really sensitive position right now because they're at this point, they're working through this waiver," said Phillip M. Singer, a doctoral student in the University of Michigan School of Public Health, who has studied potential effects of the King v. Burwell case.
Healthy Michigan, championed by Republican Gov. Rick Snyder and approved by a GOP-led Legislature otherwise wary of "Obamacare," includes a soft coverage cap at 48 months for residents who earn between 100 percent and 133 percent of the federal poverty level.
After they've been on the plan for four years, those recipients must either pay higher out-of-pocket costs or purchase private insurance through an Affordable Care Act exchange using the aforementioned premium tax credits.
Under the 2013 law, the state must obtain federal permission for the 48-month cap by the end of 2015. Without a waiver, the statute calls on the state to begin notifying enrollees the program will be terminated at the end of April.
"It's a short timeline, and King v. Burwell could really complicate the response from both the federal government and here from the state government," said Singer. "It really underscores the political volatility of a post-King world."
The Obama administration approved an initial waiver request for Healthy Michigan in December of 2013 and has generally shown an interest in working with the state, but Singer said the federal government may be less enthused by the requested coverage cap if the premium tax credit option is off the table.
"Potentially you're asking more Medicaid recipients to pay more out of pocket, so how does the Obama administration weigh increased cost-sharing for recipients with having that coverage?"
The Supreme Court is likely to rule this week or early next week in King v. Burwell, a lawsuit arguing the federal government does not have the authority to offer health insurance tax credits in the 34 states that did not set up their own marketplace, including Michigan.
A ruling against the Obama administration could undermine the president's signature health care law and end tax credits for hundreds of thousands of Michigan residents. Many Medicaid programs expanded under the ACA would not be affected, but Michigan is in a unique position of needing a second waiver for the 48-month cap.
Snyder spokeswoman Sara Wurfel said the governor and administration do not want to speculate on the the pending Supreme Court decision and what it could mean for Healthy Michigan, which has quickly surpassed early enrollment projections and generally been hailed as a success.
"The case doesn't directly impact Healthy Michigan as it exists now or the nearly 600,000 Michiganders enrolled in the innovative program," she said. "However ... the second waiver that will eventually be needed does have an exchange component to it."
Michigan lawmakers could ensure residents qualify for insurance tax credits by establishing a state-based health insurance exchange, but past efforts of that kind have failed in the GOP-led Legislature. At least one lawmaker has suggested Snyder consider an executive order.
Families USA, a consumer health care advocacy group, released a graphic this week showing how many Michigan residents could lose subsidies in each Congressional district, a data set designed pressure federal lawmakers, who could clarify the law to ensure that subsides are available to those purchasing insurance on a federal exchange.
"If the court rules in favor of the plaintiffs and withdraws subsidies, this could be fixed by Congress quickly and easily," said executive director Ron Pollack. "You literally, I mean literally, could do this with a one-page bill. Now that doesn't mean that's what Congress is going to end up doing."
If the state is unable to win the second waiver necessary to continue the Healthy Michigan plan, lawmakers could also revise the state law to allow the program to continue.
The Michigan Department of Health and Human Services on Wednesday held a public forum to discuss a draft waiver request the state must submit to the Centers for Medicare and Medicaid Services by September.
"If the second waiver is not approved, the program will end," said state Medicaid program policy director Jackie Prokop. "That's specifically stated in law, so we know there's a lot at stake here."
Despite cooperation from the Obama administration, the second waiver request process was never going to be easy. A Supreme Court ruling against health care tax credits in Michigan could make it even more challenging.
"Depending on how deep it goes, it could potentially make discussions difficult on getting the second waiver," said DHHS spokeswoman Angela Minicuci. "Other than that, we really have to see what the ruling says before we know how far it will go."
Jonathan Oosting is a Capitol reporter for MLive Media Group. Email him, find him on Facebook or follow him on Twitter.