Congress passed the Affordable Care Act – often referred to as Obamacare – back in 2010. Since that time, the results for individual Americans and their families have been a near-constant source for debate. Opponents have pointed to health care costs that have continued to skyrocket, and the millions of families that have lost their previous health insurance plans and been forced to seek new plans – often at higher rates than they had been paying prior to the law’s passage. Proponents of the law point to the millions of people who were previously uninsured, but who now have coverage. For many of that latter group of Americans, this coverage has come via an expansion of the Medicaid program.
That expansion was the direct result of the ACA’s passage, as the new law encouraged states to expand Medicaid with the promise of vast sums of federal dollars to cover much of the new costs. And while there are still some states that have not taken advantage of that opportunity, most of them were eager to provide health insurance benefits to their citizens. Michigan adopted expansion in 2014, when it created the Healthy Michigan Plan. Now, with Republicans committed to repealing the health care law, some in Michigan are wondering how any new changes will impact the Michigan program.
Medicaid Expansion in Michigan: Its Impact
According to a study from the University of Michigan, the expansion of Medicaid has had an impact that affects the entire state. That study suggests that the positive effects of the ACA-inspired expansion will result in more jobs, more wealth, and a positive impact on the state’s budget through the next half-decade. The estimates suggest that the federal money flowing in to cover Washington D.C.’s portion of the expansion will leave the state with more money than it spends on Medicaid for each of the next five years.
The study’s authors also estimate that the expansion is creating tens of thousands of new jobs for Michiganders each year – with more than eight-in-ten of those new jobs being created in the private sector. According to estimates, that job creation has helped the state generate roughly $2.3 billion in increased spending power for its citizens. It’s also adding to the state’s tax base, by providing about $150 million in revenue – including both income and sales taxes.
Current estimates for this year indicate that the expansion will allow the state to end the year with more than $400 million above what it pays for its share of the program. That’s the result of a combination of new taxes and savings. By the end of 2021, that number will shrink to $162 million, it will still represent significant savings for Michigan residents.
The Healthy Michigan Plan provides health care coverage for roughly 600,000 of the state’s low-income residents. Most of those residents had no health insurance coverage before the Michigan plan went into effect. The cost of that care is largely paid for by the $3.4 billion that the Healthy Michigan Plan receives from the federal government.
Why Some Want Repeal
Opponents of the Affordable Care Act have cited a variety of reasons why they support repeal. The law, which required that plans offered by private insurers meet a specific set of coverage requirements, has directly led to the cancellation of many citizens’ former plans, as it rendered them obsolete. Many of those individuals were forced to seek alternative plans, and often at great expense. That’s left a sour taste in many Americans’ mouths, and they’ve used those mouths to demand that their political representatives remedy the situation.
In addition, there has been a widespread failure to reduce the costs associated with health care. When the law was initially proposed, it was in response to a decades-old concern about the rising costs and unaffordability of health care. Instead of creating a law that focused on policies that could help to reduce those costs, Congress instead chose to focus its attention on health insurance. They then sold the new law as something that would reduce the cost of health care and insurance. Neither happened. Instead, insurance costs have continued to skyrocket, and millions of Americans have responded by voting the party responsible for the ACA out of office.
The Impact Repeal Could Have on Michigan Families
Changes are coming to the Affordable Care Act, though no one seems sure exactly what those changes might look like. Some elements will undoubtedly remain – the coverage for pre-existing conditions and the ability to keep children on their parents’ plan until age 26, for example. Others, like the policy coverage requirements and the individual mandate, may be pushed aside in favor of widespread market reforms designed to lower costs and increase access through greater competition.
The big issue for many low-income families, however, is the fate of Medicaid expansion. A new plan that disincentives coverage for low-income Americans could prove sufficiently unpopular that politicians in Washington will be loath to take it up. For that reason, there is reason to be optimistic about the possible survival of Medicaid expansion in one form or another.
Already, some in Congress are talking about providing the states with even more flexibility for their Medicaid dollars, though the issuance of block grants. Other proposals are being bandied about as well. The only thing that seems unlikely is that a new administration and Congress will begin this presidency by stripping away health insurance coverage from low-income Americans.
At Michigan attorneys Biddinger & Estelle, PC, we’re keenly focused on the legal issues that affect our friends and neighbors in the area and across the state, so you can expect that we’ll continue to monitor any changes to the healthcare law to ensure that we can continue to protect our clients’ interests. Meanwhile, we’ll be here to help Michigan residents obtain the estate planning and elder law services they need, including Medicaid planning strategies that can protect them against the rising costs of nursing home care now and in the future. To discover how we can help you with your planning needs, contact us online or call us today at (989) 872-5601.
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