Confused about Michigan Medicaid reform? These maps and charts explain all.

One in four Michigan residents, nearly 2.5 million people, receive Medicaid in Michigan. Michigan Republicans want to require able-bodied recipients to work.

One in four Michigan residents, nearly 2.5 million people, receive health care coverage through Medicaid.  More than 40 percent of all births in the state are covered by the federal insurance.

So it’s unsurprising that changing eligibility rules, and requiring recipients to work, would cause controversy. The Republican-led plan has attracted national attention in part because its widespread effects, and potential to unspool a key component of the Affordable Care Act.

Proponents say the requirement would encourage more recipients to work, boost a tight labor market and save taxpayers money by moving people off the Medicaid rolls.

The reforms are still a work in progress. Bills originally required recipients to work 29 hours per week, but the requirement could drop to 20 hours per week. Likewise, a controversial exemption to counties with high unemployment rates reportedly will be dropped.

Today, Bridge Magazine looks at key arguments framing the debate, exploring three key questions through a series of maps and charts: Who would be affected? Would it save money? And would it help people get jobs?

The answers, perhaps unsurprisingly, are murky.

Big program, many recipients

Medicaid provides health care coverage for nearly 2.5 million people in Michigan. Of those, 700,000 were added with the expansion allowed by the Affordable Care Act (commonly referred to as Obamacare). Recipients typically must meet income qualifications. They range from the elderly and disabled to children in poverty and adults. Individuals with incomes of $16,000 and families of four making $33,400 are eligible.

Michigan annually spends $16 billion on Medicaid care. Most of the money comes from the federal government, with $4 billion coming from state sources. Half of that,  roughly $2 billion, comes from general taxes.

To help visualize the impact of the changes, Bridge is illustrating the Medicaid population with blocks.

Each block represents 25,000 people. Here is what 2.5 million recipients looks like:

Nearly 2.5 million Michigan residents receive healthcare through Medicaid.

Children exempt

The proposed work rules would require recipients to get a job, go to school, receive job training or work at unpaid internships. But the requirements include plenty of exemptions.

First up: The proposal would only affect adults. More than a third of all Medicaid recipients –  nearly 1 million people – are younger than 19 and would be exempt.

That leaves just over 1.5 million adults who could face work requirements.

 
Nearly 1 million children are on Medicaid. None would be subject to work requirements.

Elderly, disabled exempt too

Though most seniors are covered by Medicare, thousands are still covered by Medicaid. Combined, the aged, blind and disabled comprise nearly 490,000 of the Medicaid population .

They also would be exempt. That leaves about 1 million recipients who would face the work rules.

Almost a half-million of Michigan's Medicaid population are blind, disabled or elderly.

Pregnant women, caregivers exempt

Pregnant women and those caring for young children would also be exempt. This is the hardest number to estimate, legislative analysts say. But both the Senate and House fiscal agencies believe as many as 300,000 women and caregivers would be exempted.

That leaves 700,000 people who would face work rules.

The proposed rules would also exempt pregnant women and those caring for young children, estimated at 300,000.

Many already working

By all accounts, many Medicaid recipients are already working, though there’s no way to determine how much or how many hours. But if they make more than $16,146 as an individual or $21,900 as a couple, they wouldn’t be eligible.

A University of Michigan survey of recipients of the Medicaid expansion shows nearly half are already working. Another 11 percent said they were too disabled to work.

That leaves 461,000 affected by the work requirements.

An estimated 49 percent of Medicaid recipients are already working, and another 11 percent are in too poor of health to work.

Rural counties were slated for a pass too

Bill backers originally wanted to exempt recipients who live in counties with unemployment rates over 8.5 percent.

In March, that covered 17 northern Michigan counties where 3.3 percent of the state’s Medicaid population live. The exemption would not go away until unemployment in those counties hit 5 percent (which in many has not happened since 2000.)

The exemption has proved so controversial that the bill’s main sponsor, Sen. Mike Shirkey, R-Clarklake, told Michigan Radio last week that he intends to remove it. On Monday, he told the Associated Press that Gov. Rick Snyder persuaded him to drop the provision because "tracking the unemployment rate in all 83 counties on an ongoing basis every month would have become an administrative nightmare."

Had the 17 counties with high unemployment been exempted, that would have left an estimated 446,000 facing work requirements.

Legislators are considering an exemption for people who live in counties with high unemployment. All of those that currently qualify are in northern Michigan.

Geographic breakdown

Nearly 45 percent of all Medicaid recipients are in Metro Detroit, which comprises 39 percent of the state’s population.

A rough estimate means 128,000 people in Wayne County would face work requirements, and 35,000 to 36,000 in both Oakland and Macomb counties.

Across the state, the work rules would affect 26,500 in Kent County (home of Grand Rapids) and 25,000 in Genesee (home of Flint).

Financial impact

Shirkey has said his motivation is strictly philosophical. Last month, he told Bridge able-bodied people who receive government assistance should work.

But other proponents have cited cost as a factor. The Michigan Chamber of Commerce claims Medicaid, because of the Obamacare expansion, is “over enrolled and underfunded.”

The state currently spends about $4 billion on Medicaid. About half of that comes from tobacco taxes, money from a national settlement with tobacco companies, and taxes on health-care providers.

The other $2 billion comes from the general fund, an amount equal to that spent on the prison system and on and colleges and universities.

State spending on Medicaid has grown in the last few years and is scheduled to rise in the next year.

Medicaid funding in Michigan

The federal government covers 71 percent of Medicaid funding in Michigan, including 95 percent of the cost of Medicaid expansion. General taxes cover $3.2 billion (17 percent). Another $2.3 billion (12 percent) comes from tobacco taxes, taxes on health-care providers and money from the national tobacco settlement.

 

House and Senate fiscal analysts work requirements could generate a net savings of $25 million to $45 million. That’s an overall savings of less than 2.5 percent.

The state spends about $4,300 per adult on Medicaid, and Senate and House fiscal analysts believe between 5 to 15 percent of eligible adults would be taken off the rolls.

(Other states, including neighboring Indiana, have recently added work requirements in response to a Trump administration decision in January to allow states to impose the requirements. But none of the programs has been in place long enough to see how many leave the program.)

One of the reasons the savings isn’t greater is work requirements would cost money to implement.

Analysts say it would cost at least $17.5 million to as much as $70 million to buy computer software and administer work requirements: State workers would have to monitor the program to ensure compliance.

And if Michigan reduced payouts for care, it would trigger other increased costs and lower tax revenues.

For instance, if payouts to doctors and hospitals decline, Medicaid tax revenue (the state levies a tax on providers) from health-care providers would decline as well, the fiscal analysts said.

And other costs could potentially climb as well. Patients might seek disability coverage, which provides more costly care, and hospitals would see increased claims for uncompensated care. And recipients seeking work would create more demand for other state subsidized services for the poor, including child-care and workforce development.

Where would they work?

The Michigan Chamber of Commerce has supported efforts to add work requirements in part to help the state’s labor market.

"Michigan is currently experiencing a workforce shortage and talent gap and estimates suggest that as many as 100,000 jobs are currently unfilled," said Wendy Block, senior director of health policy, human resources and business advocacy for the chamber.

It’s not clear how many current Medicaid recipients are already looking for work or if they’re qualified for the jobs that are available.

In some parts of Michigan, mainly west Michigan, unemployment has been below 4 percent for over a year and “Now Hiring” signs are ubiquitous. But could all those openings absorb the Medicaid population seeking work?

In Kent County, unemployment rates have been below 4 percent for 10 of the last 12 months. In March it was 3.4 percent, with an estimated 12,200 people still looking for work.

If the work requirements provision became law, that could mean as many as 26,500 Medicaid recipients would be required to join the workforce in Kent County, more than tripling the pool of job seekers. In neighboring Ottawa County, it could double the number of people seeking work.

And across the state in Wayne County, the number of Medicaid recipients likely required to start a job search  – nearly 128,000 – is more than three times bigger than the number of people already looking for work (over 39,000).

With unemployment at 5 percent, and ignoring the troubles with public transportation, many of those would-be workers are in Detroit and the jobs are in the suburbs. Could the workers find the jobs?

The Senate bill was approved by 26-11 on April 19, and it is now in the House for consideration. It has been referred to the appropriations committee.Through a spokesman, Snyder has said he would be in favor of the rules “if done responsibly.”

Snyder pushed the legislature in 2013 to expand Medicaid through the Affordable Care Act and now roughly 700,000 more people have coverage through the program.

House Speaker Tom Leonard, who supports the requirements, has said any differences between Snyder and the Senate version must be ironed out before the House takes it up.

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Comments

Carl Ver Beek
Wed, 05/23/2018 - 9:25am

Although a work requirement might be significant philosophically, a more targeted approach to the financial effect of Medicaid on the General Fund budget would be to prioritize the benefits, only paying for what the legislature says we can afford for Medicaid in the Budget, as compared to the other elements in the Budget. Prioritization would require a CMS waiver, but since Oregon has prioritized the benefits for over 25 years, a waiver would be easy to obtain. This would allow providers to be paid for their actual cost of services, thus ending the need for a huge cost shift to health plans for Medicaid's underpayment to providers. This would reduce the cost shift to employers for health care.

MaryBeth Strassel
Wed, 05/23/2018 - 10:20am

Clearly "rural counties exempt" = white folks exempt.

When did the most Christian country in the world start blaming the poor for their poverty? Have these "Christians" read the teachings of Jesus Christ in the Gospels which decry both the prosperity Gospel and the "God helps those who help themselves" theology ?

The proposed regulations you describe disgrace Christians and all those who care for the state's most marginalized.

Rick
Fri, 05/25/2018 - 1:16pm

Thank you. Yes, today's 'Christians' are a mean, hateful lot. Love corporations, the wealthy and blame everyone else for our problems.

Jeannie Quinn
Sat, 05/26/2018 - 8:10am

MaryBeth;
I couldn’t agree with you more. I’ve been lighting candles in church and praying hard for the last year and half. I’ve decided to join The League of Women Voters. We have to stop this cruelty.

Mark
Mon, 05/28/2018 - 6:54am

Marybeth - Get over the rhetoric. One reason to concentrate on inner cities is the amount of per capita fraud is highest. It was just a few years ago that the Dir of Social Security came to Detroit to see why Detroit had the Biggest Social Security Disability Fraud Rate of any US City. Sometimes Reforms need to be reset to balance things.

Linda Schmidt
Wed, 05/23/2018 - 11:22am

The state's record on underestimating IT costs and rushing to enact changes that end up costing more to resolve and lead to numerous lawsuits and challenges that also cost money should compel any thinking person to conclude that the state will lose money if this bill is enacted. Similarly, not accounting for costs to the state related to lack of access for healthcare by limiting cost projections should lead any thinking person to the same conclusion. All of this before even considering that jobs being open and people being qualified to fill them are two different things - or there wouldn't be a skills gap. If the legislation is changed to fund the cost of filling this gap so that the requirement is attainable that also will completely erode any "savings." These are all rational considerations that deserve analysis along with "philosophical" motivations, which also deserve robust debate because many of us believe that access to healthcare is an indicator of the degree to which we respect the value of human life.

John Tiemstra
Wed, 05/23/2018 - 11:26am

This new provision is strictly meant to punish people for being poor. Such an attitude is beneath us as a society (although apparently not beneath our legislators). Every religion I've ever heard of calls for compassion toward the poor.

***
Thu, 05/24/2018 - 12:43pm

Its no surprise, the Michigan legislature has long treated poor people with contempt, especially if they are minorities. The attitude seems to be that you aren't trying hard enough to get ahead so all of your problems are of your own making.

Zeke
Wed, 05/23/2018 - 11:35am

I am bewildered by the possibilities. Mandate finding work in an area where thousands already are seeking work that they can't find seems to be the biggest problem. The rest of the complication is pushing into the problem then having the problem push back in a multitude of more costly ways seems like a frustrating political exercise much like "Wack a Mole" For those who don't know what the game "Wack a Mole" is" picture this. You be the Governor with a mallet and when the mole sticks his/or her head up through one of the many holes in the game board you pummel the problem mole with your mallet. However when the mole thus pummeled sinks below sight it pops up in another hole and sneers at you. You viciously pummel the other problem mole with your sledge mallet into unconsciousness but as the mole falls out of sight you notice another problem mole rise up through his board hole who smiles at you even as you dispatch him with another wack from your 10 LB. sledge just as another problem mole replaces him two holes down. Now you lean back frustrated by these seemingly never ending damn mole problems that keep coming up from their hole. It is then that you realize that your solution causes more mole problems than you initially realized. Kinda like Deja Vous all over again in technical political terms.

Kevin Grand
Wed, 05/23/2018 - 1:05pm

What I find most confusing is how a law that was jammed through with the most surreptitious method possible, one that "promised" lower health care costs for all (if you like your plan, doctor, etc you can keep it), ended up COSTING the overwhelming majority of Americans more while simultaneously providing inferior coverage to what we had prior to its passage?

https://www.forbes.com/sites/theapothecary/2014/11/10/aca-architect-the-...

I'm also confused as to where the federal or state governments even derived their authority to provide health care in the first place?

The conversation on this topic really should begin there, before anyone else tries to rationalize any of the reform proposals being bandied about in Lansing.

Jeannie Quinn
Sat, 05/26/2018 - 8:24am

Do you have Healthcare? We will be spending more to deny people Healthcare than we will be saving. It’s going to cost you and every individual more for Healthcare because the cost of their unpaid care at Hospital Emergency Rooms will be passed on to us. Why don’t Republicans look at the outrageous Pharmaceutical Companies price hikes this year? The price hikes are unconscionable! Medicare and Medicaid cannot afford it. The costs are passed on to Medicare Patients who can no longer afford lifesaving drugs they’ve been on for years. Americans will be dying. That should be Legislation that would save Millions. We all know why they haven’t done it.

Doug L
Thu, 05/24/2018 - 9:36am

The only possible benefit I see is that a few Medicaid recipients may be persuaded to get job training, so they can actually get a job. I'm betting that the currently unemployed don't have the skills needed.

Jeannie Quinn
Sat, 05/26/2018 - 7:53am

Who is paying for the job training and who is going to pay to get them there? Republicans are absolutely ignorant and disgusting.

Jeannie Quinn
Sat, 05/26/2018 - 8:04am

Republicans have lost their hearts; souls and consciences. After looking at the costs involved it’s quite possible that they have lost all reasoning. Tax Cuts for Billionaires so the least capable of us have to go without Healthcare. There are no jobs for these Michiganders in Detroit and much of Northern Michigan. Are they considering paying for job training and transportation to get these poor people to school and work? No. Trump’s America is ugly and cruel.

John S.
Sun, 06/03/2018 - 7:04pm

For legislators and their families: Cadillac heath care. For the poor/partially disabled/poorly educated/employed less than 20 hours a week: over the counter medications, the emergency room, and natural selection.