As policymakers in Washington debate major legislation that, as written, would significantly reduce federal spending on Medicaid, Citizens Research Council released a brief primer on Medicaid in Michigan and the impact of those proposed cuts. Research Council Health Policy Associate Karley Abramson, the author of the paper, discusses the human and economic impacts of the proposed cuts with Research Council President, Eric Lupher. Senior Research Associate for State Affairs Bob Schneider joined the conversation with important context about the effect of the proposed cuts on Michigan’s budget, likely to experience a loss of at least $2 billion per year if the bill passes as is. “As a matter of policy, Medicaid is relatively complicated, so it is not always easy to understand how a change in the law might impact the actual delivery of health care on the ground,” said Abramson. “If you are not familiar with how Medicaid eligibility and funding work, you would not necessarily realize how dramatically the proposed legislation could impact people and health care providers in the state.” Medicaid provides health insurance coverage to a significant portion of Michigan’s residents (~23 percent) and is a vital component of the payment mix that health care providers rely on. Medicaid has taken on a larger role in Michigan over the last two decades, with spikes in enrollment during periods of economic downturns (2009 Great Recession and 2021 COVID-19) and the program’s 2014 expansion under the Affordable Care Act. “We want to help establish the public understanding of how Medicaid works,” said Eric Lupher, president of the Citizens Research Council of Michigan. “Medicaid has such a large impact on the state, both as a share of the state budget and in terms of how many people have health insurance through the program.” If federal legislation is enacted with substantial cuts to Medicaid, states will be left to respond to problems on two related fronts: the impact on people losing care and the impact on those providing care. Cuts to Medicaid will increase the uninsured population by at least 200,000 residents who will be impacted by the effects of delayed care and increased financial hardship. On the provider side, the proposed Medicaid cuts may imperil local hospitals, particularly in rural areas, as well as other types of providers. If Medicaid spending is reduced substantially, some rural providers are likely to become unviable, which will not only impact those losing Medicaid coverage but also affect people living in those areas who have secure, private coverage. Policymakers will face difficult choices as the state is, necessitating cuts to the program, reductions elsewhere, or new revenue sources – none of which are attractive options.
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