More About Michigan House Bill HB 4714 

Just the facts, nanny.

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Michigan House Bill HB 4714, signed into law in September 2013, creates the Healthy Michigan program for new Medicaid enrollees. Some provisions of the law are subject to federal approval. Here’s a quick look at the program:

It offers coverage for citizens with incomes as high as 133 percent of the federal poverty level.

Healthy Michigan requires enrollees with incomes between 100 percent and 133 percent to contribute 2 percent of their annual income to health savings accounts (MI Health accounts) after 6 months in the program. This “premium” is in addition to copays for prescription medication, doctor visits and non-emergency hospital stays. Enrollers can’t be kicked out of the program if they don’t, but the government could place a lien on their tax refunds. Unspent funds will be rolled over to cover the following year’s health expenses.

All Healthy Michigan enrollees will be placed in a contracted private health plan that provides for a health savings account into which they — or their employer — pays for health expenses, including copays.

Cost-sharing can be reduced if the individual follows preventive measures and raised to a maximum of 5 percent if not.

Copays for prescription drugs and doctor visits (typically between $1 and $3) will also be paid into a health savings account rather than at the point of service, based on how much the enrollee spends in copays during the first six months in the Healthy Michigan program. That cost is reassessed every 6 months.

After four years of Healthy Michigan coverage, cost sharing will increase to 7 percent of a person’s income — or the enrollee can move out of Healthy Michigan to a subsidized health care plan on the exchange. This is subject to federal approval in 2015.

Copays may be waived for people with chronic illnesses, such as diabetes.

Private health plans covering Healthy Michigan recipients will get financial bonuses for managing enrollee cost-sharing and achieving cost and quality goals.

Healthy Michigan requires that enrollees have access to primary care and preventive services, and that they are offered the opportunity to complete advance directives for end-of-life care when they enroll in the program.

Coverage in Healthy Michigan will include hospitalization, prescription drugs, preventive tests, habilitative services and hearing aids — all benefits that comply with ACA 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. 

 

Cost-Shifting 

 

Michigan paroles somewhere between 8,000 and 9,000 prisoners each year — people who typically have no health care coverage and who need re-entry services, such as housing, substance-abuse counseling and psychotropic medications. The cost is high — around $55 million annually — but it pays off in reduced recidivism rates.

With expanded Medicaid, many of those parolees and probationers will fall within the income bracket that makes them eligible for the Healthy Michigan program — and the mental health and substance-abuse counseling that it covers.

The expectation is that many of those parolees and probationers will get the help they need — and won’t return to prison. About 20 percent of the prison population has mental health disorders, according to Department of Corrections spokesperson Russ Marlan. 

And the federal government, rather than Michigan, will pick up 100 percent of the costs for the first three years, after which the state will pay 10 percent of the costs.

This is cost-shifting par excellence — but for Michigan, it means there will be fewer prisoners, lower costs of incarceration and re-incarceration, and ideally, less crime. 

The recidivism rate among parolees who get re-entry services — including mental-health treatment and psychotropic medication — has fallen from 46 percent to 30 percent, Marlan says.

“We now have the sixth lowest recidivism rate in the country. We’re giving people some great choices now — the opportunity to be rehabilitated, to be a productive citizen — and funding some of these services is what national best practices have shown,” he says. “We’re excited about the Medicaid expansion. It may be cost shifting, but general funds have been shrinking, so if you can get federal dollars to apply to a corrections budget, you can use the savings for roads, schools and other things that have been cut. We’re going to be able to fund things we know will reduce recidivism.”

In anticipation of the Healthy Michigan program, the Department of Corrections is helping likely parolees to get documentation ready and planning to help them apply.

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