Late last week Michigan filed a waiver amendment with CMS that provides more detail on what they are planning in their Medicaid expansion, which they call “Healthy Michigan.”  The waiver amendment is a huge step forward in covering low-income adults, so here’s the good news and a few elements we plan to keep our eye on.
First, the good news.

• Many low-income adults in Michigan will finally have coverage. Under the waiver amendment, Michigan estimates that 300,000 to 500,000 low-income adults will be eligible for the new program.  The state will cover additional low-income parents and adults without children.  The current Medicaid eligibility level in Michigan is 35% of FPL for childless adults (in a limited benefits program) and 64% of FPL for working parents, so the waiver would raises that floor significantly to 133% of FPL.
• Michigan plans to use a solid enrollment strategy. Though the expansion program will not be up and running until April 1, 2014, Michigan plans to identify applications submitted on or after Oct 1, 2013 that received a denial because income was too low, and send them eligibility notification for April 1, 2014. They also plan to mine exchange data for people between 100 to 133% FPL enrolled in QHPs and let them know that they will be eligible for Healthy Michigan.  We’d also suggest they consider reaching out to parents of kids enrolled in Medicaid and CHIP and other public benefit programs and letting them know they are eligible for Healthy Michigan, that strategy is the subject of an earlier CCF blog post.
• Adults in Healthy Michigan will receive some additional benefits beyond the existing Medicaid program.  Coverage in Healthy Michigan will include habilitative services, hearing aids, and preventive health care services to comply with essential health benefits rules. The state is also planning to use the enhanced Medicaid financing to help pay for early identification, care coordination and treatment in its existing mental health and substance abuse programs.
• Michigan is thinking about transition plans for the childless adults in the current waiver who will move to Healthy Michigan. The childless adult group with incomes between 0 and 35% of FPL in the existing waiver program will be moved to new waiver group on April 1, 2014. They will allow prior authorizations initiated under the current adult waiver program to be honored for a set period of time to ensure a smooth transition.  County Health Plan providers also contracted with Medicaid Health Plans will primarily serve the Healthy Michigan enrollees.  Also, people currently in the Medicaid Family Planning program will move to Healthy Michigan.

Next, here are a few elements we plan to keep a close eye on:

• Although this is a major coverage expansion and a large-scale waiver, CMS is not required to provide a public comment period.  Because Michigan already has an 1115 waiver that covered a smaller group of childless adults up to 35% of the FPL, it filed this plan as an amendment to an existing waiver.  Technically it’s considered a waiver amendment and not a new proposal so it is not subject to the federal public comment rules.  We are hopeful that CMS will request public comments even though it is not required, and the state is seeking public comments and questions at the email address: healthymichiganplan@michigan.gov.
• Everyone in Healthy Michigan will have a type of health savings account. The Healthy Michigan plan requires each enrollee to have a Michigan Health Account.  The state, the beneficiary and potentially an employer can make contributions to the account. Enrollees will have to complete an annual health-risk assessment to identify issues (such as alcohol use, substance use disorder, tobacco use, obesity, immunization status).  If they participate in healthy behaviors, their required contributions to the account will be reduced.  If there are leftover funds in the account at the end of the year they will roll over to the next year.  If a beneficiary becomes ineligible for Healthy Michigan, the balance of their individual contributions will be provided as a voucher to buy private insurance (only).  We do not yet know how these incentive payments will take shape.
• Most people enrolled in Healthy Michigan will have to pay some of the cost of their health services after the first six months in the program. Everyone enrolled in the program other than Native Americans, pregnant women, and other populations exempt from co-pays under federal law, will have to pay co-pays or monthly contributions in Healthy Michigan. Most enrollees will pay co-pay amounts similar to the current Michigan Medicaid state plan and they will not exceed amounts in the ACA’s cost-sharing regulations.  Generally co-pays are $1 to 3 per visit or prescription, with a maximum of $50 for a non-emergency inpatient hospital stay. There will not be co-pays for preventive services, emergency services or emergency hospital admissions. Medicaid health plans, and not providers, will be responsible for collecting copays.
• The proposal includes a new way of collecting co-pays. After the first six months enrolled in the program, enrollees will be asked to pay the average co-pay amount incurred in the first six months.  Enrollees will have to pay this average amount each month into the account going forward. (For example, if in the first six month period, the enrollee had 2 physician visits with copays of $2 each, two dentals visit with a $3 copay, and one vision visit with a $2 copay, this is $12 in copays total incurred in the first six months, so this would average out to $2 per month per month the enrollee will pay in the second six month period). This average will be collected and recalculated every six months to reflect current utilization of services. Health plans will collect these average co-pay amounts rather than providers.
• People above poverty will pay a monthly premium. People in the program with income with incomes between 100 to 133% of FPL will have to make an additional contribution of 2% of annual income to the Michigan Health Account that operates like a premium.  The total amount of cost-sharing for them will not exceed 5% of annual income.
• The state may try to collect cost-sharing through unusual methods. People who do not pay their cost-sharing will be allowed to stay in the program, but the state mentions in the proposal that it is considering collecting unpaid contributions through a lien on tax refunds. We will continue to watch this one for sure!