Capital News Service

of the Michigan State University School of Journalism

Federal health law to add 375,000 to state Medicaid rolls

Capital News Service

LANSING – Health experts say the newly enacted federal health care legislation will expand the state’s Medicaid program by 2014, allowing coverage of an additional 375,000 people.

Medicaid is a federal and state program available for uninsured individuals and families who cannot afford their health insurance. Although it’s a nationwide program, each state has its own eligibility requirements for coverage.

Michigan’s program is limited to residents with income below the poverty level who meet age and health requirements, according to the Department of Community Health (DCH).

Families, children, pregnant women, elderly and disabled adults who meet the income requirements typically qualify. However, low-income adults without children typically don’t.

Antrim, Leelanau and Benzie County are among the highest in the state in percentage of adults without health insurance, according to the 2010 Michigan County Health Rankings.

“More people in Michigan will qualify for Medicaid because we’ll have a higher income requirement and fewer restrictions than we currently do and, as a result, we will have fewer uninsured people without access to health care,” said Sharon Parks, president of the Michigan League for Human Services.

“The challenge will be how we pay for the cost of having higher caseloads,” she said.

Under the new law, states can apply for federal funding to expand their programs to cover low-income people earning up to 133 percent of the poverty level, $14,404 for an individual and $29,326 for a family of four.

States that accept the federal government offer now would have to pay the increased cost of Medicaid expansion until federal funding begins in 2014, when all states must comply, according to the DCH.

The Legislature will be responsible for determining when Medicaid expansion begins, according to the DCH.

In 1996, about 1 million people in the state were covered by Medicaid. Today 1.7 million people, one in six, rely on the program, according to the DCH.

Department Director Janet Olszewski said expanding eligibility and removing age limits will benefit many residents who cannot afford private insurance and it will reduce the pressure on hospital emergency rooms.

Spencer Johnson, president of the Michigan Health and Hospital Association, said the new law contains flaws related to reimbursements to hospitals and expands Medicaid without recognizing the program is significantly underfunded.

For example, beginning in 2014 the state will also have to begin reimbursing primary care physicians for Medicaid patients at federal Medicare rates, said Steve Fitton, senior deputy director of the department’s Medical Services Administration.

In recent years, the Legislature has eliminated such optional services for Medicaid as adult dental care, chiropractic care, hearing aids, eyeglasses and podiatry due to budget cuts.

Today the only optional services covered are mental health, prescription drugs, orthotics and prosthetics.

Johnson said, “Michigan’s frayed health care safety net continues to strain under the weight of lost health care coverage as a result of the state’s economic environment.”

The new federal law will help to address many of those difficulties, he said.

Through Medicaid, hospitals are reimbursed 74 cents on the dollar for the cost of services, while physicians are reimbursed 50 cents.

The Michigan State Medical Society (MSMS) said that 88 percent of physicians accepted Medicaid patients in 1999. That proportion has steadily declined since then due to reductions in reimbursements.

“Right now our reimbursement rate for Medicaid patients is too low considering the size of the Medicaid population,” Olszewski said. “It used to be that doctors had a predominately privately insured population with a smaller percentage of Medicaid patients, but that is no longer the case.”

Doctors who treat children and pregnant women are particularly hit by current reimbursement rates because Medicaid pays for 44 percent of the births and 36 percent of pediatrics coverage for children, Olszewski said.

In addition, she said, “We’re seeing a decline in primary care physicians because new medical students aren’t going into primary care anymore.”

Rural counties have the highest percentages of children covered by Medicaid, according to the MSMS. In 2007, the three counties with the largest proportion were Wexford, Ogemaw and Luce where more than half the children were in the program.

“Particularly in northern Michigan, primary care physicians are leaving entirely because they serve such a high percentage of Medicaid patients and they aren’t being reimbursed sufficiently,” Olszewski said.

In addition, about 70 percent of nursing home residents are covered by Medicaid, while another 17 percent are covered under the federal Medicare program, according to the Health Care Association of Michigan.

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

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Filed under: Legislation

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