Michigan GOP governor proposes Medicaid expansion

LANSING, Mich. (AP) -- Republican Gov. Rick Snyder on Wednesday backed the extension of Medicaid coverage to 470,000 residents under the Obama administration's health care overhaul, saying it is the right thing to do despite resistance from his own party that controls the Legislature.

He is the sixth GOP governor to propose expanding the taxpayer-funded health insurance program, joining the leaders of Ohio, Arizona, New Mexico, Nevada and North Dakota. Snyder has criticized the federal health care law in the past but to a lesser extent than other Republican governors.

The U.S. Supreme Court allowed Medicaid expansion last year in its ruling upholding the constitutionality of the federal health care law. Under the law, states can increase the eligibility under their Medicaid programs to people whose incomes equal 138 percent of the federal poverty level.

Extending Medicaid to nearly half of Michigan's uninsured is a "win for all," Snyder told a crowd of happy doctors, nurses, insurance officials and other supporters gathered at a Lansing hospital not far from the Capitol.

Asked about Republicans' opposition to President Barack Obama's signature domestic achievement, he said he looked at the numbers and concluded that boosting the number of Medicaid participants would save the state money and make people better off.

"This improves lives at an individual level, where these people can hopefully have a great opportunity to have employment," Snyder said. "If you have health issues, it can make it difficult to have job or make it difficult to hold a job you could otherwise hold. It's a tremendous gain at the individual and family level. If you look at it from a societal level or governmental level, it is an opportunity to save costs because ... we're paying for this in some fashion through hidden charges or other pieces of the equation."

Snyder said the chance to cover nearly half of the state's uninsured is "huge," adding that he is comfortable the health care system can handle the extra caseload.

The federal health care law gives states the option to accept the expansion, refuse it or postpone a decision. But there are benefits for states that choose to expand Medicaid now: The U.S. government will pick up the entire cost in the first three years and 90 percent over the long haul.

Snyder is expected to run into resistance from Republican lawmakers opposed to the health law.

Rep. Joe Haveman, a Holland Republican who chairs the House Appropriations Committee, said his proposal deserves a closer look, but Republicans have questions.

"The federal government has a long history of promising support for long-term government programs and then coming up well short when the time comes to honor their commitment," Haveman said in a written statement. "We are going to do what's best for the people we serve and do our homework on this proposal before committing one way or the other. Michigan residents deserve that."

Ohio's John Kasich earlier this week reiterated his opposition to what he called "Obamacare" and the requirement that people have health insurance, but said Medicaid expansion makes sense for Ohio. Pennsylvania's Tom Corbett said he will not pursue an expansion, at least for now, echoing complaints of other GOP governors about the cost, inflexibility and inefficiency of Medicaid.

Snyder said Medicaid expansion would save the state $200 million a year initially because more people who now receive mental health services and medical care from state-funded programs would instead be covered with federal money. He called for setting aside $100 million a year of those savings so Michigan can pay 10 percent of the cost for new enrollees down the line. He said the expansion would effectively cost Michigan nothing until 2035.

This is the second time in less than 18 months that Snyder has bucked some in his own party on the Affordable Care Act.

His call to implement a state-run online marketplace where the uninsured can get taxpayer-subsidized private coverage died in the GOP-led House. Michigan now is on the path toward a partnership exchange controlled primarily by the federal government.

By expanding Medicaid in 2014, Michigan could next year add about 320,000 people to a program that already serves about one in five state residents. About 470,000 people would be added longer term.

Three years of full federal funding for newly eligible enrollees — roughly $2 billion a year — is available from 2014 through 2016, gradually phasing down to 90 percent in 2020 and after. The match rate for existing Medicaid participants is 66 percent.

To qualify, annual household income must be below 138 percent of the federal poverty level, about $15,000 for an individual and $32,000 for a family of four.

Conservatives are concerned deficit-burdened Washington will renege on the 90-percent deal and also have a philosophical resistance to expanding government programs and the notion that federal dollars are different from state dollars.

At least one business organization is supporting Snyder. The Small Business Association of Michigan echoed his concerns with the uninsured not getting preventive treatment and later going to the emergency room for more expensive medical care that is passed onto people and companies with private insurance coverage.

"It's called cost-shifting and it's been happening for a very long time," said Rob Fowler, the group's president and CEO. "Whether you supported Obamacare or not — and we did not — one of the main elements of it is 'everybody in.'"

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Email David Eggert at deggert(at)ap.org and follow him at http://twitter.com/DavidEggert00