Michigan and the ACA’s Medicaid expansion

Nearly 750k enrolled in Healthy Michigan Plan; Work requirement was overturned by a judge in March 2020.


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Former Michigan Governor Rick Snyder, a Republican, pushed for an alternative approach to Medicaid expansion in Michigan and ultimately gained bipartisan support for the plan, which is called Healthy Michigan. Michigan residents are eligible for Medicaid with incomes up to 138 percent of the poverty level (as called for in the ACA), but the state obtained approval from the Obama Administration to charge premiums equal to 2 percent of income for people with income above the poverty level. The money is held in health savings accounts that are administered by the state.

How many people are enrolled in expanded Medicaid in Michigan?

Sign up for the program began April 1, 2014 (a few months after many other states, where Medicaid expansion took effect at the start of 2014), and enrollment in expanded Medicaid stood at nearly 652,000 people at the start of 2020. But enrollment climbed significantly in 2020, likely due in large part to the COVID-19 pandemic and the resulting job/income losses. As of the end of June 2020, there were 749,547 Michigan residents enrolled in Healthy Michigan.

As of April 2018, some Healthy Michigan enrollees were transitioned to private plans (MI Marketplace Option). This includes people with income above the poverty level who had been enrolled in Healthy Michigan coverage for 12 or more consecutive months, and who did not participate in the Healthy Behaviors Incentives Program or receive a medical exemption.

By March 2020, total enrollment in Medicaid/CHIP in Michigan stood at 2,317,725, which was a 21 percent increase over the enrollment total at the end of 2013. This total includes people who were already eligible for Medicaid based on the pre-ACA (Affordable Care Act) guidelines, as well as the more than 650,000 people who had enrolled as a result of Medicaid expansion (and that number has since grown to about 750,000 during the COVID-19 pandemic). The increase in total Medicaid/CHIP enrollment from 2013 to early 2020 was only about 406,000 people, however, which is considerably less than the total number of people covered under Medicaid expansion. But that has to be considered in light of the fact that traditional Medicaid enrollment declined between 2013 and 2015 (from more than 1.9 million enrollees to about 1.7 million) due to an improving economy.

In 2017, when GOP lawmakers in Congress were intent on repealing the ACA, Snyder urged Congress to leave Healthy Michigan intact, calling it a “successful” program, and a “good role model” for other states. University of Michigan researchers reported that Medicaid expansion in Michigan resulted in about 30,000 new jobs, and a $2.3 billion increase in personal income in the state in 2016. The researchers also determined that Michigan saved $235 million in 2016 as a result of Medicaid expansion, thanks to federal Medicaid funds covering some prison health care costs that were previously covered by the state.

Michigan’s Medicaid work requirement proposal took effect January 1, 2020, but was soon overturned by a judge

Michigan proposed a Medicaid work requirement for the Medicaid expansion population that received federal approval in late 2018. The work requirement waiver is based on legislation the state enacted in 2018 (details below), and it took effect as of January 2020; non-exempt Medicaid expansion enrollees had to complete at least 80 hours per month of activities that could include work, school, job training, etc., and begin reporting their work hours as of February 2020.

But in early March, a federal judge overturned the state’s work requirement, which immediately eliminated the work requirement and reporting requirements (the lawsuit had been filed in November 2019 in an effort to block the work requirement). Gov. Gretchen Whitmer — who has long opposed the Medicaid work requirement but who took office after it had been enshrined in statute and approved by CMS — had asked Michigan lawmakers to delay implementation of the Medicaid work requirement until the lawsuit was resolved, in order to avoid wasting taxpayer dollars. But they opted to allow it to continue as planned, although that only lasted a couple of months.

Utah and Michigan were the only states with Medicaid work requirements in effect as of early 2020, and both have since been suspended (Michigan’s by a court ruling, and Utah’s in response to the COVID-19 pandemic). Medicaid work requirements have been approved in several other states as well, but lawsuits have thus-far resulted in them being overturned in Kentucky, Arkansas, and New Hampshire. Indiana has suspended its Medicaid work requirement in the face of a pending lawsuit, and Arizona has indefinitely postponed its work requirement amid uncertainty over the legality of these programs.

If the work requirement had remained in place in Michigan, the number of people covered under Healthy Michigan was expected to decline, but that’s a feature, not a bug: The reduction in enrollment is a key element of Medicaid work requirements, and Governor Snyder noted when he signed the legislation that Healthy Michigan enrollment was far higher than had been predicted.

Premiums and Healthy Behavior Requirements set to take effect in October 2020, but could be delayed due to COVID-19

SB897, the legislation that created the state’s Medicaid work requirement, also required the state to seek a waiver from CMS to allow for new eligibility rules for people who have been enrolled in Medicaid expansion for at least 48 months and whose income is above the poverty level (ie, between 100 percent and 138 percent of the poverty level); these provisions were also approved by the Trump administration, but in order to focus on the Medicaid work requirement, Michigan delayed the healthy behavior and premium requirements until October 2020.

At that point, affected enrollees will have to complete a “health behavior assessment” with increasingly challenging healthy behavior requirements, and they will have to pay 5 percent of their income in premiums. This is an increase from the 2 percent of income premiums that already apply to Healthy Michigan enrollees with income above the poverty level. And it’s worth noting that under the ACA, in states where Medicaid has not been expanded, people in this income range pay up to slightly more than 2 percent of income for the second-lowest-cost silver plan in the exchange — although Medicaid has lower out-of-pocket costs than a plan in the exchange, even with cost-sharing reductions.

As of June 2020, the Healthy Michigan website still indicates that these requirements will take effect later in 2020. But that depends on the COVID-19 pandemic: Michigan issued a rule in April that prohibits Medicaid terminations unless the person dies, moves out of the state, or requests a coverage termination. The rule applies for the duration of the COVID-19 emergency period, which currently extends through mid-July in Michigan, but could be extended as the summer progresses. If the COVID-19 emergency period ends up being extended into October or beyond, the state would not be able to terminate coverage due to enrollees’ failure to comply with the premiums or healthy behavior requirements.

Additional legislation enacted in 2019 to make it easier for enrollees to comply with work requirement reporting

SB362, which Governor Gretchen Whitmer signed into law in September 2019, made some changes to the impending work requirement in an effort to reduce the number of people who would inadvertently lose coverage under the program. The new legislation gives people until the last day of a month to report work hours for the previous month (as opposed to only until the 10th day of the month to report work activities from the previous month, as the original legislation required), and it also essentially gives people an extra 60 days to report compliance (after missing the reporting deadline) without the month in question being considered a non-compliance month. SB362 also exempts people from having to report their work hours if the state can verify their work activity “through other data available to the department.”

According to a fiscal analysis of SB362, the legislation was likely to reduce the number of people who will lose coverage under the work requirements (projected at 27,000 to 54,000 people), but only “minimally.”

And the GOP-leg legislature eliminated a provision in Whitmer’s proposed budget that would have provided $10 million for the state to use for outreach and education about the new work requirement, and to help people comply with it. Consumer advocates noted that although SB362 would help to make compliance with the work requirement easier than it would otherwise have been, it’s still almost certain to lead to inadvertent coverage losses (among people who are working but aren’t aware of the reporting requirements or aren’t able to fulfill them), especially without the “work supports” funding that lawmakers removed from the proposed budget.

In a letter to lawmakers, Whitmer called Michigan’s work requirement “the most onerous in the nation” and reiterated her concerns about the coverage losses that were likely to result once the program is implemented. Once it was clear that lawmakers would not approve the $10 million that Whitmer had proposed to fund a public information campaign and compliance assistance related to the work requirement, Whitmer noted that “it now appears that the legislature is less interested in giving Michiganders the facts and the tools to comply with work requirements than in taking away Michiganders’ health insurance.” She urged lawmakers to reconsider the outreach funding, and to also consider a provision that would automatically terminate the work requirement if it becomes clear that a significant number of people are losing coverage.

The Healthy Michigan work requirement was ultimately overturned by a judge, but SB362 remains in place and would apply if the work requirement were to be resurrected in the future.

Michigan’s work requirement: The details

The Michigan legislature approved a Medicaid work requirement during the 2018 session (the version that passed is summarized here; the modifications created by 2019’s SB362 are here). Although the work requirement has since been overturned by a judge and is not in effect, the following is a summary of how it would have worked if it had been allowed to remain in place:

Enrollees could be non-compliant (either not working or not reporting their work to the state) for up to three months in a 12-month period, but after that, they would lose eligibility for Medicaid for at least a month and wouldn’t have been able to re-enroll without becoming compliant with the work requirement.

SB897 passed the Senate in April 2018, almost entirely along party lines (all Democrats in the Senate voted no, as did one Republican, Senator Margaret O’Brien; the remaining Republicans all voted yes). The measure passed the House in June (again, almost entirely along party lines — one Republican joined Democrats in voting against it, while the other 61 Republicans all voted in favor of imposing a work requirement for Medicaid). Although Governor Snyder had opposed some provisions in the Senate’s version of the bill, he signed the final version of the bill into law in June 2018.

The next step was for the state to seek federal approval for the work requirement. The waiver proposal was submitted to CMS in September 2018 and federal approval was granted just a few months later, in December 2018. The Trump Administration had already approved work requirements in KentuckyArkansas, New Hampshire, Wisconsin, and Indiana, and approved Maine’s work requirement waiver on the same day Michigan’s was approved. [Maine’s waiver proposal was created entirely by the LePage administration, without legislation backing it. So new Governor Janet Mills was able to simply withdraw the proposal after taking office, and a work requirement will not take effect in Maine; Whitmer did not have the same leeway in Michigan, as the work requirement was in statute.]

Michigan’s legislation initially called for non-exempt individuals to work at least 29 hours per week in order to be eligible for continued Medicaid coverage, but that was later amended to be 80 hours per month, which is more in line with what other states had proposed. The Senate bill also would have exempted people in counties where unemployment exceeded 8.5 percent. But that provision was controversial, as it essentially would have exempted rural areas (with predominantly white populations) but not urban areas like Flint and Detroit (with people of color making up a larger percentage of the population), because although there are pockets of high unemployment, they don’t extend to the entire county. That provision was also scrapped in the version of the bill that was sent to Gov. Snyder.

Various populations would have been exempt from the work requirement, including those with disabilities, the medically frail, people under 19 (under 21 if a former foster care youth) or over age 62, pregnant women, full-time students, people who are caretakers of a child under six or an incapacitated person who needs full-time care (only one adult per household can be exempt as a caretaker), and people receiving unemployment benefits or recently released from incarceration.

The fiscal note for SB897 provides rough estimates of the number of people expected to be exempt. The work requirement would have applied to an estimated 670,000 non-disabled Healthy Michigan (Medicaid expansion) enrollees. An estimated 130,000 of them would have been exempt, with the other 540,000 having to comply with the work requirement.

The majority of able-bodied Medicaid recipients are already working or attending school, but the House fiscal analysis projects that enrollment in Healthy Michigan would decline by somewhere between 5 percent and 10 percent as a result of the work requirement. Loss of access to Medicaid could be due to increased income that makes a person ineligible for Medicaid, or failure to comply with the work requirement or the reporting requirements that go along with the work requirement (as noted above, the relaxed reporting requirements included in SB362 were expected to reduce the number of people who would lose coverage, but only slightly).

The fiscal note estimated that after the work requirement was fully implemented and the upfront costs were completed, the work requirement could save the state of Michigan between $5 million and $20 million per year. This would be due to the reduction in enrollment in Healthy Michigan, which is ultimately the goal of Medicaid work requirements. As Michigan Senate Minority Leader, Jim Ananich (D, Flint) has said, if the goal were to boost employment, “we’d put money toward daycare, we’d put money toward transportation, we’d make sure the talent programs we’re talking about funding were already in place.” But instead, the goal was a reduction in the number of people covered by Medicaid expansion, and a work requirement is an effective way to do that. It also makes it easy to blame the loss of coverage on the individuals themselves (ie, they should have gotten a job) rather than addressing things like intergenerational poverty.

Michigan’s legislation called for Medicaid expansion in Michigan to terminate if CMS didn’t approve the waiver or something substantially similar.

Michigan’s eligibility guidelines

You qualify for Medicaid in Michigan if your household income is below the following limits (the eligibility calculations includes a built-in 5 percent income disregard, making effective eligibility an additional 5 percentage points higher than each of these limits)::

  • 195 percent of the federal poverty level for infants under 1 year old
  • 160 percent of FPL for children 1-18 years old; children with slightly higher household income — up to 212 percent of FPL, qualify for the Children’s Health Insurance Program, which is called MICHILD in Michigan
  • 195 percent of FPL for pregnant women
  • 133 percent of FPL for parents and other adults

While these are the main groups covered by Medicaid, other people — such as those who are blind or disabled — may also qualify. See the Department of Community Health website for more information on covered groups and eligibility guidelines.

Use the annual income chart from Medicaid.gov to see FPL shown as dollar amounts.

Enrolling in Medicaid

Here is how you can apply for Medicaid:

  • Apply online using MI Bridges, or enroll through Healthcare.gov.
  • Fill out a paper application (the form is DCH-1426) and turn it in at a local office, by fax, or by mail. The mailing address is Health Insurance Affordability Program; Michigan Department of Community Health; P.O. Box 30273; Lansing, MI 48909. Find the location or fax number for a local office.
  • Get help with your application by calling the application help line at 1-855-276-4627.

The path to Medicaid expansion

It took nearly eight months to authorize the Healthy Michigan plan. Republican Gov. Rick Snyder announced his support in February 2013, saying it was a good move for public health and state finances. Snyder had support from numerous health care and advocacy groups, but was opposed by some Republicans in the state legislature.

Ultimately, the state Senate passed Medicaid expansion in late August 2013 after an eight-hour session. The House followed suit a few days later, passing it in early September, and Snyder signed it into law on Sept. 16, 2013. University of Michigan Medical School researchers believe the state’s bi-partisan solution could be a model for other states that have yet to expand Medicaid.

While the Senate passed Medicaid expansion, it also prevented it from taking effect immediately and delaying the start of Healthy Michigan enrollment until April 1, 2014 (instead of January 1, 2014, which is when Medicaid expansion took effect in states that implemented it as called for in the ACA, without changes). The Department of Community Health said each day’s delay would cost the state $7 million in federal funding.

While the delay had a negative financial impact, it was also credited as a factor in the successful rollout of the program. Michigan was able to use the first three months of 2014 to plan and to build awareness, leading to rapid uptake of the program once enrollment began.

Second waiver keeps Healthy Michigan alive

In December 2015, CMS approved Michigan’s second waiver, albeit an adjusted form of the waiver that the state had submitted. The legislation Michigan had passed called for changes to Medicaid eligibility after an enrollee had been in the program for 48 cumulative months. Michigan’s plan was to have individuals at that point either switch to a QHP through the exchange (subsidized with Medicaid funds), or remain in the Healthy Michigan Plan but with cost-sharing of up to 7 percent of income (with an opportunity to reduce the cost-sharing by participating in various healthy behaviors).

Some of this (the 7 percent of income cost-sharing, and the 48-month time limit) presented problems for the Obama administration CMS, but the waiver had to be approved in order to keep the Healthy Michigan program active past April 2016, as the stipulations had been built into the state law.

So CMS worked with Michigan officials to reach a compromise: As of April 1, 2018 (four years after Healthy Michigan took effect), some Healthy Michigan enrollees with income above the poverty level (ie, between 100 percent and 138 percent of the poverty level) had to either switch to a QHP subsidized with Medicaid funds, or work with their doctors to fulfill the healthy behavior requirements to remain on the Healthy Michigan Plan.

This change applies to people who have been enrolled in Healthy Michigan for 12 or more consecutive months. And there’s no longer a mention of cost-sharing amounting to 7 percent of income, but there is still an opportunity for enrollees to reduce their cost-sharing via healthy behaviors. It should be noted, however, that about 80 percent of Healthy Michigan enrollees have income below the poverty level, and the second waiver makes no changes to their coverage under the program.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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How to apply in MI

Apply online using MI Bridges. Fill out form DCH-1426. Call the application help line at 1-855-276-4627.

Eligibility: Children up to 1 year with household income up to 195% of FPL. Children ages 1-18 with household income up to 160% of FPL; children with household income up to 212% of FPL qualify for MICHILD (low-cost health insurance for kids). Pregnant women with household income up to 195% of FPL. Adults with household income up to 133% of FPL (138% with the built-in income disregard). Select other groups: see details

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