Michigan Senate Democrats

Sen. Vincent Gregory | Talking Points – MASSSM Forum

April 21, 2018

Facts/Statistics

● The Medicaid program covers 1 in 5 low-income Americans.

● In Michigan in 2016, 22% of people relied on Medicaid and 15% relied on Medicare.

● Children make up more than 40% of all Medicaid recipients.

● 65% of Americans oppose cutting funding for Medicaid.

● Medicaid cost $553 billion in the fiscal year of 2016. Of that, the states paid for $204.5
billion and the federal government covered 348.9 billion.

● Medicaid accounts for 9% of federal domestic spending.

● The largest Medicaid costs are for the elderly and disabled due to long-term care costs.

● In 2010, the Affordable Care Act expanded Medicaid to include non-elderly adults with
income up to 138% the Federal Poverty Level, or $16,753 for an individual in 2018.

● Many Medicaid recipients are working but have no access to employer insurance (50%
of HMP beneficiaries are working). (Source: SB 897 Bill Analysis)

● Medicare provides medical and health care to 59 million elderly persons and young
persons with disabilities.

● 1,895,558 people in Michigan are enrolled in Medicare (19% of Michigan’s total

population).

● In Michigan, the ACA has insured 45% of non-insured Michiganders.

● 4.4 million Michiganders with pre-existing conditions are now covered, who were
previously denied coverage.
Social Security

● I do not believe that our Social Security system is broken. It is working — and provides
benefits to 59 million people.

● Furthermore, it has almost $3 trillion in assets! Social Security should be strengthened

further, and not weakened like the current administration has suggested.

● I think people forget that more than 1 in 10 children, and 4 in 10 veterans, receive Social
Security benefits.

● It's also critical for women, who often live longer than men but frequently face a wage
gap throughout their working lives — and who are less likely to have employer-
sponsored pensions or retirement benefits.

● Much like Medicare, Social Security is an earned benefit that working Michiganders pay
into so that they can live comfortably in their older years when they are more likely to
experience additional health care needs.

Medicare

● While Medicare is not perfect, it has provided comprehensive, affordable and high-
quality health coverage for millions of seniors for more than 50 years. It helps to provide
financial stability for families who otherwise would be inundated with costly medical
bills.

● More than 2 million Michiganders rely on Medicare for access to physicians, affordable
prescription drugs and quality end-of-life care.

● Furthermore, it's an earned-benefit program. Americans pay into the program trusting
that they will have access to quality health care as they grow older, when they will have
a greater need for coverage.

● I am very concerned by some of the federal health care proposals, which have
threatened to dismantle Medicare as it exists today. Cuts to Medicare would reduce
coverage, increase out-of-pocket expenses and ultimately increase per-capita health
care costs. I will never support any proposal that threatens Medicare.
Legislation

Medicaid Work Requirements | SB 0897 (Sen. Shirkey) | Bill status: Referred to committee
** SHIRKEY IS WORKING WITH THE GOVERNOR — LANGUAGE IS SUBJECT TO CHANGE **

Bill would put in place a working requirement for individuals enrolled in the state’s Medicaid
program. If the waiver is approved, the following changes will take place in October 2019:

● Medicaid recipients must work an average of 29 hours a week or engage in other

qualifying activities, such as participation in a court-ordered (or physician
recommended) substance abuse treatment program, education, a jobs training
program, or an unpaid internship.

● If regional unemployment reaches 8.5 percent — actively seeking employment would

count towards the work requirement, but once unemployment decreases to 5%
individuals in that county would no longer be exempt.

● Individuals are given a 30-day grace period to find work or other qualifying activities
before being subject to the requirements.

Dem Talking Points on Medicaid Work Requirements:

● Unknown Effect: MDHHS doesn’t have the data to even project how many of the nearly
2.5 million Medicaid beneficiaries in Michigan would be subject to work requirements —
though past research indicates it might be about 25 percent of the beneficiary
population.

○ Bill disproportionately impacts women (and single parents), who already face
numerous obstacles in obtaining employment and child care.
○ Before implementing a work requirement, we should address common barriers
such as child care and transportation.

● Burdensome Requirements: Bill requires 29 hours/week of work to receive Medicaid,

especially burdensome for vulnerable groups like single parents.

○ SNAP program only requires 20 hours/week of work.

○ Part-time jobs often vary. What if one week, they work 32 hours and the next
 they are only scheduled 25? Do we kick them off of Medicaid?

● Lengthy Lockout: Lockout period for coverage is 12 months; in Kentucky it’s 6 months
while Indiana’s is just 3 months.

● Short Grace Period: There is no grace period for seasonal employees looking for a new
job or stuck between seasonal jobs.

● Limited Funding for Increased Demand: The bill requires MDHHS to direct Medicaid
recipients to job training resources, child care, and transportation. All have limited
funding and the bill doesn’t expand funding to compensate for the increased demand.

● Low Economic Productivity: This bill could make Michiganders sicker, which would lead
to lower economic productivity — essentially making the problem the bill hopes to solve
worse.

● Legal Challenges: It's not clear the waivers are legal because the law Medicaid is
organized under doesn't allow the Health and Human Services Secretary to impose new
eligibility criteria.

● Most Exempt Anyway: The report also pointed to a University of Michigan study
indicating 48.8 percent of Healthy Michigan recipients are employed. And 27.6 percent
were out of work, due to things like older age, poor health, being retired, being a
student or being a homemaker.

● Cost: The plan is expensive and could exceed $20-30 million (some have estimated even
higher, at over $100 million), plus it slashes a significant amount of Medicaid funding
from the feds.

○ Michigan will lose $1.87 in federal matching funds for every $1.00 in state
money it cuts from its Medicaid budget.
○ Michigan Republicans are willing to lose $2.00 in federal funding to cut $1.00
from someone in the Medicaid program.
○ The costs are split 1:2. For every one dollar we put in, we get two dollars back. I
don’t know how well your 401k or stock portfolio is doing, but I’m sure it doesn’t
have a 200 percent return rate. If we don’t use this money, we lose it — it’s that
simple.
MDHHS Budget

● Includes language that sets a flat 48-month cap for the Healthy Michigan Plan. Under
current statute, once an individual hits 48 months they can either remain on Medicaid
and pay a little bit more in cost-sharing, or they can migrate to the state exchange with
state subsidies. This provision of the budget would eliminate those options entirely.

● Assumes that SB 897 is going to pass, and includes boilerplate language that reduces the
staff of MDHHS employees if the feds don't approve the waiver.

● Next week in Appropriations, I will be offering an amendment to appropriate more

dollars to the CMH's so that they can help people with Medicaid spend-down plans
meet their deductible.

Other Legislation

Medicaid Spend-Down Issue

● In both FY 2016-17 & 2017-18, Sen. Gregory got budget boilerplates in the MDHHS
budget to require MDHHS to do a report addressing the challenge of meeting monthly
deductible requirements.

● The March 2018 report showed that 44,868 individuals didn't meet their spend-down in
FY 2017, and that the best way to address the situation would be to increase the income
disregard to decrease the deductible amount.

● Sen. Gregory's budget requests for FY 2018-19 included an ask for $6.4 million for CMH's
to help individuals meet their deductible.

HB 5487 (Rep. Canfield)

Bill status: Passed House (109-0), referred to Senate committee

The bill creates a universal credentialing process for providers enrolling in the states contracted
with Medicaid health plans. Under current statute, providers have to submit certain credentials
to each health plan separately.
SB 0669 (Sen. Bieda)
Bill status: Referred to committee

A person who receives a benefit that they are not entitled to receive shall forfeit and pay the
state the full amount received.

HB 5386 (Rep. LaSata)

Bill status: Referred to committee

“HOPE Act” — Participant’s eligibility information must be verified before receiving medical
assistance or food assistance.

SB 0823 (Sen. O’Brien and Curtis Hertel, Jr.)

Bill status: Referred to committee

Modified prior authorization exemptions for certain drugs in Michigan's Medicaid program.
● Prior authorization is a process where the insurer requires additional information from
the prescriber to determine the medical necessity of a drug.

HB 4403 (Rep. Schor)

Bill status: Referred to committee

Amends the Social Welfare Act to allow individuals enrolled in Medicaid to receive medically
necessary acute treatment and clinical stabilization services for opioid use disorder. These
services include medically necessary inpatient care at an approved facility.

“Healthy Michigan Plan” (HMP)

Bill status: Passed - Sept. 2013

● As Michigan’s most recent Medicaid expansion, the bill now covers more than 650,000
Michiganders. Enrollees are guaranteed coverage for the following:

○ Ambulatization, hospitalization, emergency services, maternity care, mental

health care, substance abuse recovery, prescription drugs, habilitative services,
laboratory services, preventative and wellness services, chronic disease
 management, pediatric services for 19 and 20-year-olds, dental, home health
and family planning.

● Non-frail adults are required to pay up to 2% of their income, and certain medical
services require copays. These co-pays are not allowed to exceed 5% of the enrollee’s
total income.

● The program creates 30,000 jobs annually, has generated more than $2 billion in
personal spending power, and has set an example for other conservative-leaning states
that are interested in expanding their Medicaid programs.

“Affordable Care Act” (ACA)

Bill status: Passed March 23, 2010

● The ACA mandates health insurance coverage or they face a tax penalty.
○ Mandates employers of 50 or more employees to offer all full-time employees
health insurance or face a penalty.

● Allows states to expand Medicaid with the feds fronting the bill for the first two years,
then gradually lowering the match rate to 90% over the next six years.

● Establishes an online federal health care exchange with four different health care
options — each varying in coverage and price.

● Eliminates lifetime and annual dollar amounts on health care coverage.

● Prohibits insurers from using preexisting conditions when determining premium rates.

● Provides subsidies for those at or below 400% of the FPL with the cost of out-of-pocket
expenses.

● Provides tax credits for specific income brackets to help offset the cost of monthly
premiums.

● Allows dependents to stay on their guardian’s health insurance plan until the age of 26.

● Created new taxes to fund the ACA.

● In Michigan, the ACA has insured 45% of non-insured Michiganders.

● 4.4 million Michiganders with preexisting conditions are now covered, who were
previously denied coverage.