Medicaid Expansion Makes Sense for Michigan

01/15/2013 03:28 pm ET | Updated Mar 17, 2013

Expanding Medicaid benefits not only the uninsured, but it also benefits employers and individuals who purchase private health insurance, hospitals and Michigan's economy as a whole. The Affordable Care Act (health reform) gives states the opportunity to expand Medicaid eligibility to cover all non-elderly citizens and eligible immigrants up to 138 percent of the Federal Poverty Line.

Governor Snyder has the power and obligation to decide whether Michigan should participate in Medicaid expansion. Now is the time for Governor Snyder to join other governors across the country by deciding, and publicly announcing, that Michigan will do the right thing and take advantage of this rare opportunity.

Medicaid expansion benefits Michigan's economy. The Affordable Care Act provides that the federal government will pay for 100 percent of Medicaid expansion's costs between 2014 and 2017 and ultimately pay for 90 percent of its costs in the following years. Analysts at the Center for Healthcare Research and Transformation project that Michigan can reap up to $1 billion in savings in the next 10 years due to expansion. They also project that Medicaid expansion will bring more than $30 billion of federal dollars into Michigan's economy over the next 10 years.

Medicaid expansion benefits those who need health insurance, particularly low-income adults. According to the Center for Budget and Policy Priorities, there are about 676,000 total uninsured Michiganders who would be eligible for Medicaid if Michigan participates in expansion. Many of these uninsured are low-income adults. Low-income adults often struggle especially hard to get health insurance, and many times go without, for several reasons: the individual health insurance market is often inaccessible and too expensive; if they have jobs, those jobs often don't provide health insurance benefits; and, they are currently largely ineligible for Medicaid. Medicaid expansion gives these low-income adults a chance to get the health insurance coverage that they need and deserve.

Medicaid expansion benefits employers and individuals with private health insurance. If you're an employer or individual who purchases private health insurance, part of your costs come from uncompensated care that hospitals provide to the uninsured by law. If we reduce the number of uninsured, we reduce the amount of uncompensated care expenses that get passed onto those with private health insurance. The Center for Healthcare Research and Transformation projects a savings between $640 and $985 million over the next 10 years statewide to those who purchase private health insurance because of Medicaid expansion.

Medicaid expansion benefits hospitals. Hospitals, especially those that treat a lot of uninsured patients, get extra compensation from the federal government called Disproportionate Share Payments (DSH payments). As the law stands now, the federal government will reduce DSH payments to hospitals across the nation, including hospitals in Michigan, between 2014 and 2020 because it expects that fewer people will be uninsured. If we fail to expand Medicaid, Michigan hospitals will most likely be in a nasty bind that could jeopardize their ability to provide quality care -- their DSH payments will go down and they may face an increase in, or at least steady, levels of uncompensated care expenses.

Governor Snyder believes that "to build a stronger Michigan, we must build a healthier Michigan." I agree wholeheartedly, but we've got a long road ahead of us. Let's get the ball rolling by expanding Medicaid.