Bridge Magazine: Medicaid work rules another test for Gov. Gretchen Whitmer and Republicans

Democratic Gov. Gretchen Whitmer has signaled since taking office that she wants to renegotiate a controversial law that will impose work requirements on some Michigan Medicaid recipients for them to keep health benefits starting next year.

Republican Senate Majority Leader Mike Shirkey says there’s no reason to change the work law he helped to pass last year.

How the two leaders settle those differences may foretell whether politically divided government will produce results in Lansing, as leaders on both sides have promised, or lead to more gridlock on this and other contentious issues, such as environmental regulations and road funding.

Whitmer hasn’t yet elaborated on what changes she plans to seek from the Republican-majority Legislature, whose leaders — Shirkey and House Speaker Lee Chatfield — sponsored work requirements legislation; Shirkey’s version was signed into law last term by a Republican governor.

But her concerns appear to focus on problems raised in a Bridge Magazine story last year showing how a law passed in Arkansas resulted in thousands of poor people losing Medicaid eligibility because they had trouble complying with that state’s complicated reporting requirements.

Representatives for the two Republicans told Bridge that Whitmer has not yet raised her ideas for revising work requirements for Healthy Michigan Plan recipients, as Michigan’s Medicaid expansion program is known. But she extended an olive branch their way in both a letter to the federal government and in her inaugural State of the State address, saying that any changes she would pursue would continue to encourage work as well as protect health coverage.

“We must encourage personal productivity and fight fraud effectively, without undermining the health or the finances of hard-working Michiganders,” she wrote the federal Centers for Medicare & Medicaid Services, which approved Michigan’s work requirements in December.

Shirkey told reporters last week he is “a little disappointed in her approach,” adding that he wants the work requirements to go into effect next year as currently written.

Shirkey is one in a minority of Republicans who voted to expand Medicaid in 2013, despite what he said were philosophical objections. He told Bridge he advocated for the work requirements last year because he said Healthy Michigan has grown too large and fiscally unsustainable. The new rules also are intended to help people find jobs at a time when talent attraction is one of employers’ biggest challenges.

He also pushed back on suggestions that Michigan’s law would repeat the mistakes made in Arkansas. Arkansas implemented work requirements in a way “I decided we shouldn’t — quickly,” Shirkey told Bridge. He said the reason he wanted to allow more than a year before the requirements took effect was so the state Department of Health and Human Services would have time to implement them.

The chaos in Arkansas, Shirkey said, “isn’t because people are choosing to not work. It’s because they’re finding the system cumbersome. So shame on us — shame on us — if we don’t really study and learn their system and make sure we don’t make the (same) mistakes.”

In December, the Legislature awarded DHHS $1.5 million for a partial year of funding related to implementation of the Medicaid work requirements. The department estimates ongoing costs, including for 54 positions, will be close to $33 million. Legislators also awarded $13.5 million in one-time money to DHHS to update information technology systems to support the Healthy Michigan Plan work requirements.

Whitmer has said she is nevertheless concerned about the prospect that thousands of low-income Michigan residents who receive health coverage under the Healthy Michigan Plan could lose their benefits for failing to comply with the new rules.

Critics of state work rules have said Medicaid was never designed to be a workforce program before the Trump administration last year allowed states to create work requirements.

In her letter to the federal government, Whitmer cited a new report from Manatt Health, the legal and consulting health care group of Los Angeles-based professional services firm Manatt, Phelps & Phillips LLP, that estimated between 61,000 and 183,000 Healthy Michigan recipients could lose their Medicaid benefits over a year. That projection is based on the experience of Arkansas, where more than 12,000 people — and more than 18,000 in 2018, Manatt wrote, citing state government data — lost coverage after work requirements took effect.

“Work requirements are new to Medicaid, but Arkansas’s experience provides valuable insight into how such requirements may affect coverage in other states,” the report states. “This analysis, based on a review of Arkansas and Michigan data with adjustments for differences and similarities between the states, projects large coverage losses in Michigan that result from the challenge of identifying people who the state has sought to exempt or who have met the conditions of the work requirement.”

DHHS spokeswoman Lynn Sutfin said the department is reviewing Manatt Health’s analysis and its own data and will make its own projections about the number of recipients who could lose Medicaid coverage for lack of compliance.

Whitmer cited her concerns with the work rules on the 2018 campaign trail, where she highlighted her role in helping to pass bipartisan Medicaid expansion in Michigan as a Democratic state senator.

Shirkey said he is skeptical of Manatt Health’s projections of coverage losses in Michigan based on what happened in Arkansas because Arkansas implemented its program differently and Michigan’s program has not yet started.

“It’s a heavy lift for sure,” said Emily Schwarzkopf, a senior policy analyst and specialist in healthcare with the Michigan League for Public Policy. How the politicians handle the politics of the issue will be critical.

“She wants to promote work and she wants to ensure people have coverage, so if they can agree on some shared goals — maybe Governor Whitmer doesn’t get everything she wants and Senator Shirkey doesn’t get everything he wants — but there can be some compromise.” Feb 18, 2019 – Bridge Magazine