By Rob Fowler/SBAM
The Small Business Association of Michigan supports the broadening of eligibility criteria to participate in the Medicaid program so that people under 138 percent of the poverty level can be covered.
SBAM may be considered a surprising voice in support of this effort. However, I’ve been at the intersection of small business health insurance coverage and public policy for many years. We had something of an organizational epiphany about a decade ago, when I came to realize that the uninsured really matter to business.
The reality is that people go to our health-care system and they get care, and if they can’t afford it, they still get care but it’s uncompensated. Uncompensated care actually gets passed along to those who can pay. It’s called cost shifting and it’s been happening for a very long time. And it has found its way into the base rates of health insurance for small businesses all across the state.
It’s a terrible business model to take a growing burden of people who come to the health-care system without compensation and shift it to a shrinking group of people – small business owners – who can still afford to pay for health insurance. We support expansion of Medicaid because we believe it ultimately can reduce the sort of piling-on effect that’s been happening to paying customers for many years.
Currently, Michigan hospitals end up providing more than $880 million a year in uncompensated care to patients who are unable to pay. These costs end up being shifted to people who have insurance, employers who pay for it for their workers and taxpayers.
I believe opponents of expansion are approaching this issue from two sincerely held, but misinformed, perspectives.
First, that Michigan’s participation in Medicaid expansion somehow confers approval or acceptance of the federal Affordable Care Act.
SBAM opposed passage of the Affordable Care Act and rooted for the U.S. Supreme Court to overturn the law. But that didn’t happen. President Obama’s re-election ensures that the Affordable Care Act will remain the law of the land until at least 2016. We don’t like it, but we’re realistic enough to accept that we have to play the hand we have been dealt.
Second, there is concern that expanding Medicaid eligibility puts Michigan on the hook for a large amount of future financial liability.
But, as Gov. Rick Snyder has stated, Medicaid expansion would save the state $200 million a year initially, as more people who receive health care and mental health services from state-funded programs get covered through money from the federal government instead.
The governor has proposed putting half of the money saved into a health savings account that would help cover the state’s increased share of costs when the federal government scales back its funding for the Medicaid expansion. If the federal government does not keep its commitments in the long term, then the state will be scaling back the Medicaid eligibility. This has happened before and can happen again.
Medicaid expansion makes good business sense for Michigan’s government, its businesses and, most obviously, its uninsured – because getting coverage for the uninsured matters to business.