Michigan: Detroit News does the right thing but still has to take digs at Obamacare

A few weeks ago, the Detroit News posted a story gushing praise all over Michigan's implementation of the Affordable Care Act's Medicaid expansion provision, known locally as "Healthy Michigan", and somehow managed to not mention the ACA once until the 9th paragraph...and even then, failed to explain the connection between the two (as in, HM only exists because of ACA).

A couple of days ago, the editiorial board of the News posted an editorial which correctly calls for the renewal of Healthy Michigan, which requires a federal waiver once a year (I think) in order to continue because it includes modifications from simply increasing the eligibility threshold to 138% of the Federal Poverty Level.

While I applaud the Detroit News for recognizing the benefit of Obamacare/ACA Medicaid expansion (around 600,000 Michiganders have enrolled, well above expectations), I couldn't help but note that the wording of the editorial still a) doesn't make it clear that Healthy Michigan can only exist at all thanks to the ACA, and b) somehow still manages to take cheap shots at the ACA itself along the way:

The Affordable Care Act faces enough trouble without placing at risk a health care program that works. Michigan’s response to Obamacare is working, and should be allowed to continue to serve 600,000 residents.

Right off the bat: A slam on the ACA in general, and the implication that HM is a "response" to Obamacare (as opposed to being a slightly tweaked provision of the ACA).

Healthy Michigan turned out to be a success, surpassing enrollment estimates. It also contains innovative features to encourage personal responsibility, proving the benefit of allowing states more room to craft health insurance programs outside the strict boundaries of Obamacare.

Innovative features such as "requiring the working poor who to pay fees they can't really afford, partially defeating the point of expanding Medicaid to them in the first place." Still, half a loaf and all that...

But because it didn’t stick strictly to the letter of the Affordable Care Act, Michigan needs a federal waiver to keep the program going, and the Centers for Medicare and Medicaid Services in Washington is balking. Unless the waiver comes, 600,000 Michiganians risk being tossed off Medicaid.

See what they did there? All of a sudden it's the administration's fault if 600K people are tossed to the curb, not the Michigan GOP legislature's fault for not simply expanding Medicaid the way the ACA called for in the first place. Yes, the waiver should be granted, but it wouldn't even be necessary if you'd just followed the guidelines of the law 2 years ago.

Skeptics predicted that the personal responsibility requirements of Healthy Michigan would discourage residents from enrolling.

Actually, I don't seem to recall anyone predicting that. I could be wrong. When people are drowning, they'll take any rope thrown to them, even if they have to pay for part of the rope with money they don't really have.

But that prediction has proved untrue. The program is popular, and is meeting the needs of Michigan residents, while buffering the state somewhat from runaway costs.

Runaway costs? The ACA covers 100% of the costs for the first 3 years, gradually dropping each year until it reaches 90% of the cost permanently starting in 2020 (vs. the 34% that Michigan has to pay for traditional Medicaid enrollees). According to the Kaiser Family Foundation, average annual growth in Medicaid spending has averaged only 2% per year since 2010. Obviously the addition of 600,000 people to the 1.9 million enrolled in the program prior to ACA expansion ("Healthy Michigan") will, by definition, increase the the growth rate starting in 2017, but let's look at how that plays out:

  • According to the KFF, in Michigan the average cost per enrollee is around $5,000 per person.
  • I'm assuming that ACA expansion Medicaid enrollees cost the same per person as traditional Medicaid. I have no idea whether this is true or not.
  • Assuming that's the case, Michigan's cost as of 2013 was around 1.9M x $5,000 x 0.34 = $3.2 billion
  • Michigan's cost as of 2017 for those 1.9M traditional Medicaid enrollees, assuming that same 2% growth, would be around $3.5 billion.
  • The additional cost the first 3 years of "Healthy Michigan"? 600,000 x $0 = $0 (other than administrative costs for the separate program itself)
  • The additional cost the following years? 600,000 x $5,400 (assuming that same 2% historic growth) x 0.10 = $324 million + $3.5 billion

In other words, the actual cost in 2017 would be around $3.824 billion vs. $3.5 billion without ACA expansion, or around 9% higher, but--and this cannot be emphasized enough--would cover 600,000 additional people. I'd hardly call that "runaway costs", especially after taking into account the savings to hospitals (and therefore the rest of the public by way of fewer uncompensated emergency room visits paid for by spreading the increased costs to other people).

Oh, one more thing: Take a look at the photo accompanying the News editorial:

Notice anything odd about it? How about the incredibly misleading caption?

No, Detroit News, Healthy Michigan is not an alternative to a "state insurance exchange". The two have little to do with each other (aside from people also using the ACA exchanges to enroll in Medicaid, that is). ACA Medicaid expansion is supposed to be in addition to setting up a state exchange, not in place of...the people who enroll in private policies via the exchange are, for the most part, in a completely different sitaution than those who enroll in the other. Get it straight, willya?