It's 'Fresh Thinking'

February 2, 2007
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GRAND RAPIDS — With Gov. Jennifer Granholm expected to touch on health care coverage for the poor and uninsured in Tuesday’s State of the State speech, the Grand Rapids Area Chamber of Commerce is preparing to lobby for increased payments for Medicaid services.

It’s not every day that a business group urges a boost in spending on Medicaid, the state- and federally funded health coverage for the poor. But Andy Johnston, chamber advocate, said he and the chamber’s Health Care Committee think dollars should be shifted around to increase Medicaid payments to health care providers — without increasing taxes.

The Michigan Chamber of Commerce last week was expected to back the proposal. And two other West Michigan chambers have said they support Grand Rapids’ “A Business Case for Medicaid Reform.” With committee appointments in the state Legislature settled just a couple of weeks ago, Johnston said he’s getting ready to meet with lawmakers.

“For me, it is kind of interesting to have a business group be advocating for more Medicaid payments,” Johnston said. “This is something that the business community needs to realize, is that the under-funding of Medicaid is impacting employer-sponsored health insurance in West Michigan.”

President Jeanne Englehart said she is encouraged by the initial response to the plan.

“We are extremely pleased to see the Michigan Chamber of Commerce endorse our policy position regarding Medicaid reform,” she said. “In a survey of our members conducted in December 2006, the rising cost of health care was listed as one of the top two concerns for West Michigan businesses. Our ‘Business Case for Medicaid Reform’ addresses the cost-shift by the Medicaid program to the private sector, which is an important piece of the overall efforts to stem rising health care costs.”

Both Medicaid and Medicare, the federal health program for those over age 65, pay providers less than cost for health care services, but Medicaid’s payments are far less than Medicare.

Already it’s difficult for the needy to find providers who accept Medicaid, and those that do must charge higher rates for those patients who have health insurance to make up the difference. Thus, health care premiums for employers and employees end up being higher to cover this difference, accounting for about 20 percent of premium prices, Johnston said. That’s about $234 for an individual’s premium and $734 for a family premium, according to the Michigan Department of Community Health.

Among the local chamber’s call for Medicaid reforms:

**Choose which procedures Medicaid should cover with the money available in the shrinking state budget.

**Raise Medicaid payments to cover the cost of services.

**Add a reasonable increase in co-pays for services, prescriptions and premium sharing, tempered by incentives for individuals who follow healthy lifestyles and chronic disease management.

**Transparency in Medicaid payment rates by hospital providers.

**Subsidies to employers for part of the premium costs for qualifying employees.

**Increase the percentage of the state Disproportionate Share Fund that goes to West Michigan. Currently southeast Michigan receives nearly 90 percent of the fund, which is supposed to offset costs for hospitals that treat more-than-average Medicaid recipients. “This is over a $50 million fund, and we’d like to see some equity in that,” Johnston said.

Johnston said the cost of these changes could be covered by changing how current funds are used rather than by a tax increase.

Lynda Zeller is president and executive director of the Kent Health Plan, which administers a state program and coordinates health care for about 6,000 Kent County residents whose income is 150 percent of the poverty level or less. Zeller helped shape the chamber’s proposal.

She said she thinks the stars are coming into alignment for real and positive change in health care coverage for the needy.

“I have never seen, at least, this odd mix of allies, these people who normally are arguing more than agreeing, and they are putting out papers where they’re agreeing reform needs to be done,” Zeller said. “We are at a unique point in time. It would surprise me if by 2010 we don’t have significant reform, either at the state or national level.”

Johnston said he believes Granholm is “on the same page” regarding reform and expects the State of the State to encompass her Michigan First proposal with an April 1 implementation date.

Aired in 2006, the proposal is aimed at getting private health care plans for approximately 550,000 of the 1.2 million Michiganders without insurance and with incomes below 200 percent of the poverty level, which is $19,350 for a family of four. It also would improve access to affordable coverage for individuals and small businesses to target the working poor with income levels above 200 percent of the poverty level.

However, the program is contingent on receiving a waiver from the federal Department of Health and Human Services for how Medicaid money is used. Granholm met in December and again last week with HHS Secretary Mike Leavitt.

Zeller and Johnston both said Michigan First would get a warm reception, assuming the federal waiver comes through to make it possible.

“The bottom line is we all hope Michigan First happens,” Zeller said.  “Between the challenges with financing, matching funds and politics, if the Legislature and the governor pull this off, they ought to have a really big party, because they have a lot of challenges to get there.”

Johnston said he hopes some of that reform-minded spirit is applied to Medicaid, as well.

“We’re trying to advocate for some of that, for some fresh thinking,” he said.      

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