LANSING – An expanded Michigan health care plan to cover 1.1 million uninsured state residents, supported with $600 million in new federal funds, was announced Thursday by Gov. Jennifer Granholm.
She said the plan, first outlined in this year’s State of the State address, should improve health for low-income persons, lower costs for the insured who are subsidizing care for the uninsured, and ease the strain on hospital emergency rooms. It would go into effect by April 2007.
Granholm said the state is negotiating with federal officials for a waiver, good for 10 years, to run the program, which she said is similar to a much heralded universal health care program in Massachusetts. Though the aim of the Michigan plan is also universal coverage at an affordable cost, among the key differences is the Michigan plan would not mandate that everyone obtain health care insurance.
The proposed $1 billion Michigan First Health Care plan would not require new state funds, at least initially. It would use some $400 million already spent for mental health and some public health services as a match for the federal funds.
“We want every citizen to have health care,” Granholm said. “We want to revolutionize health care.”
Many details are yet to be worked out, and legislation will eventually be needed after the state obtains the federal waiver in order to implement the program.
Businesses and some Republicans complained about the lack of information about the plan, including criticism that the governor is hoping to attract support based on press releases rather than details of a program.
A spokesperson for Senate Majority Leader Ken Sikkema (R-Wyoming) said because there are no details on how much money would be required and how the plan would work, Sikkema would not comment.
But officials at Sparrow Hospital in Lansing, where Granholm outlined the new moves after touring an expanded and updated emergency room center now under construction, said the proposal should provide many benefits, including better and more appropriate care for the uninsured.
The state plan would involve partnerships, through a state-run “exchange” which administers an array of options, with health care providers, insurers and businesses that do not now offer health coverage to employees. Businesses could use pre-tax dollars to provide health care for their employees.
While not a mandate like in Massachusetts, which Granholm said amounts to a health care tax, she views this program as “an offer they can’t refuse.”
Some 550,000 individuals with incomes below 200 percent of the federal poverty level would get subsidized plans, and another 550,000 who are not insured but have higher incomes would be able to enroll with payments set on a sliding scale.
“This way individuals will have access to primary health care and will not just show up in emergency rooms,” the governor said, adding the plan would promote wellness and wise behaviors.
State officials had said a month ago that universal coverage was the next logical step given the initial proposal to cover just the 550,000 who are at or below the 200 percent of poverty level. The Department of Community Health budget (SB 1083*) passed by the Senate includes $200 million in federal funds for the program, based on the original proposal, and given the projected April, 2006 implementation date.
Granholm said that like Massachusetts, the Michigan plan would need to be designed so those who are already covered do not “dump” the health care plans they already offer in order to enroll in the government-subsidized program.
Sparrow CEO Dennis Swan said uncompensated care amounts to $45 million of his hospital system’s $800 million in health care provided annually, with 85 percent of that due to services provided to the uninsured.
Sparrow officials also say that access to health care will mean that illnesses will be less severe and many emergency room visits can be avoided.
“Without question, hospitals and the Michigan Health and Hospital Association are looking at alternatives because the status quo is not acceptable,” he said. That is true of hospitals across the country, he said, adding that Massachusetts and some other states have staked a lead in addressing the problem of the uninsured.
Granholm said part of the payoff is expected to be felt by those with insurance, whose costs currently include some $700 per policy to subsidize the cost for uninsured persons.
And she said that would also help Michigan businesses become more competitive in the global marketplace where other western industrialized countries shoulder the burden of health care rather than private companies.
House Speaker Craig DeRoche (R-Novi) said he’s been working with Massachusetts Governor Mitt Romney to understand the plan, and that there are “serious considerations” to be made with that proposal. But he also said that it seems like Granholm believes she can simply copy the Massachusetts plan for Michigan.
“Michigan needs a Michigan plan,” he said.
DeRoche said the Massachusetts plan values the private sector and personal responsibility – two key areas he feels the governor wants to scrap with her adaptation. He also said that it’s interesting that Granholm is already doing away with her health care coverage plan that she just introduced in this year’s State of the State address.
Wendy Hofmeyer, director of health policy and human resources for the Michigan Chamber of Commerce, said it is hard to embrace the plan when so little is known about how it would operate. “Until we see what the waiver application looks like, it’s kind of hard to take a position,” she said. “They’re trying to get people to say, ‘yes, we support this’ based on a press release.”
From what is known, she said the only similarity with Massachusetts is that both would get 550,000 uninsured low-income persons off the Medicaid rolls. “It’s expanded Medicaid as far as we’re concerned,” she said. But she said the argument of dealing with uncompensated care has merit and believes that individuals would likely be healthier if primary coverage is offered.
She said accountability must be part of the program and the big question is what happens after the waiver expires and federal funding is no longer guaranteed. “Coming up with funding for a large program like this is not easy without cutting essential service elsewhere or raising taxes,” she said.
Republican Party Chair Saul Anuzis issued a single-sentence response: “A press release is not a plan.”
While Granholm stressed benefits in particular for small business, Mike Rogers, vice president for communications for the Small Business Association of Michigan, said the group was concerned it was not consulted even though its president, Rob Fowler, sits on the governor’s Council of Economic Advisors.
The governor said the plan would also reduce overall health care costs by expanded use of technology, some of which makes health care information more portable between providers, and promoting healthier lifestyles.
The coverage provided through plans offered by Blue Cross and private insurers through the “exchange” would run the gamut of managed care, small group market plans, use of pre-tax income for contributions to health plans, and other approaches.
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