In the summer of 2013, when the State of Michigan Legislature debated whether or not to expand Medicaid, there was considerable discussion about a number of issues, including the role of the private sector and whether to include a "time limit" on Medicaid benefits. The Legislature ultimately passed the Healthy Michigan Plan (the state's Medicaid expansion) by one vote in September 2013. We discussed Michigan's path to Medicaid expansion in a previous Health Affairs Blog post.
Section 1115 Waiver Requests
As part of the legislation, the state required the Michigan Department of Health and Human Services to submit two 1115 waiver applications. The first waiver, submitted on November 8, 2013, included a number of provisions, notably, the establishment of a cost-sharing structure connected to a health savings account for most recipients.
Under this first waiver, an individual's maximum cost-sharing would be 5 percent of family income but could be lower based upon an individual's participation in certain healthy behavior programs established by participating Medicaid health plans. The State of Michigan submitted its second waiver request in September 2015 to the Centers for Medicare and Medicaid Services (CMS) in order to continue the Healthy Michigan Plan beyond April 30, 2016.
The waiver application reflected the state legislation, requiring individuals enrolled in Healthy Michigan for 48 cumulative months to choose one of two options:
- a Qualified Health Plan (QHP) on the Marketplace using state-provided premium assistance amounts comparable to premium tax credits and cost-sharing subsidies available on the Marketplace; or,
- to stay on the Healthy Michigan Plan with cost-sharing that could total 7 percent.
Medically frail individuals (i.e., those with physical and/or mental disabilities that significantly impair their ability to perform one or more activities of daily living) would be exempt from this provision, and the 7 percent cost-sharing could be reduced for any enrollee who participates in healthy behaviors as defined by the Michigan Department of Health and Human Services.
As of December 28, 2015, just under 607,000 Michiganders were enrolled in the Healthy Michigan Plan. Approximately 20 percent of those enrollees were between 100 and 138 percent of the federal poverty level (FPL). Many fewer of these enrollees are likely to be affected by this waiver because analyses have shown that individuals near 138 percent of FPL often experience income churning (frequent movement between Medicaid and health insurance exchanges). Such churning would interrupt eligibility during periods of higher income, delaying the achievement of the 48 cumulative months of Medicaid coverage.
Even though the change would only directly affect this subset of the covered population, without the waiver approval, the entire Healthy Michigan program would have ended on April 30, 2016, unless the Legislature agreed to an alternative approach.
An Alternative Approach
The waiver request presented the U.S. Department of Health and Human Services with a dilemma. First, current federal rules limit total Medicaid premium and cost-sharing to 5 percent of income for individuals between 100 and 150 percent of FPL. And, second, unlike the Temporary Assistance for Needy Families (TANF) program, Medicaid has never had eligibility or benefit coverage related in any way to the amount of time an individual was enrolled in Medicaid.
The 7 percent potential cost-sharing level tied to the fact that an individual was enrolled for 48 cumulative months met considerable resistance from some national advocacy groups concerned about this precedent. Michigan-based interest groups, on the other hand, were overwhelmingly in favor of the waiver because of concerns that the 2015 Legislature was more conservative than the one that narrowly passed Healthy Michigan in 2013 and, without the waiver, almost 600,000 people covered under Healthy Michigan would likely lose coverage.
Throughout the waiver review process, state leaders consistently described discussions with CMS as positive and that there was no backup plan should the waiver be denied. And, indeed, on December 17, 2015, CMS approved the Michigan waiver.
What was approved by CMS, however, included a significant difference from what was submitted: under the approved waiver and beginning April 1, 2018 (four years after the launch of the Healthy Michigan program), all individuals (except those who are medically frail) between 100 and 138 percent of FPL must work with their physicians on certain health improving strategies or get their coverage through the QHPs.
While the waiver approval makes no mention of a 7 percent cost-sharing amount, participation in healthy behaviors lowers cost-sharing for beneficiaries, allowing the state to change the cost-sharing structure but preventing beneficiaries from ever actually paying 7 percent of income.
In the state's press conference, Nick Lyon, the Director of the Michigan Department of Health and Human Services, stated that there would be few, if any, individuals who would pay more than 5 percent under the Healthy Michigan Plan. Additionally, by requiring all beneficiaries to choose the Healthy Michigan Plan or the marketplace after a certain date, the approval bases the time limit on program operation, rather than on each individual's length of time in the program.
With this waiver approval, the State of Michigan and CMS have taken a creative approach to accomplishing both legislative intent and staying true to the principles and rules of the Medicaid program. And, while there are many implementation details yet to unfold, now that the state's second waiver has been approved, it appears that the Healthy Michigan Plan will continue for the foreseeable future.
Authors' Note
The Center for Healthcare Research and Transformation (CHRT) at the University of Michigan receives funding from both the University of Michigan Health System and Blue Cross Blue Shield of Michigan. Richard Hirth receives funding from the Michigan Department of Health and Human Services through a contract with the University of Michigan to conduct the Healthy Michigan Plan evaluation authorized by the Centers for Medicare and Medicaid Services.
from Health Affairs Blog http://ift.tt/1R9e9Y0
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