Michigan Lawmakers Mull $31M For Health Care Exchange

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Michigan Gov. Rick Snyder’s administration told lawmakers it needs their approval within weeks to spend a $31 million federal grant to help build a consumer-friendly health insurance marketplace under the contentious federal health care overhaul, or else the state will be stuck with a bill.

Though Republicans rejected the GOP governor’s request to spend federal money on a state-run exchange last year, the issue is not going away because open enrollment for hundreds of thousands of uninsured Michigan residents is less than eight months away. The new online exchange, likened to Travelocity or Orbitz, is supposed to make it easier for people and businesses forced to carry health insurance under the Affordable Care Act.

Snyder now is pursuing a partnership exchange controlled primarily by the federal government. If legislators do nothing, federal officials could set up and run the marketplace.

Either way, the state has to make technology changes to link electronically with the federal exchange because it will be used to determine people’s eligibility for Medicaid and – if they buy private insurance on the exchange – whether they qualify for income-based federal aid to help pay their premiums.

“We are still going to get calls. People are going to be coming to the state with questions. That is an administrative cost,” Chris Priest, who is managing the state’s exchange project, told a House budget subcommittee.

Spending the $31 million grant will save the state from having to divert its own dollars from elsewhere in the budget, he said. He also argued that having a partnership will save Michigan insurers wanting to offer health plans on the exchange from an extra layer of regulation in Washington.

Another benefit is while the U.S. government will run the website and call center, the state will have an oversight role and be able to hire customer-assistance specialists so people can get face-to-face assistance, Priest said.

Snyder’s request is renewing debate within the GOP-led Legislature over whether to accept that President Barack Obama’s signature domestic achievement is the law, or to fight it every step of the way.

“I don’t support Obamacare, but I don’t have (an) Obamacare phobia – whereby I think it’s just going to go away if we do nothing,” said Rep. Al Pscholka, a Stevensville Republican. “On Oct. 1 there’s going to be an exchange and on Jan. 1 of ’14 you have to have health insurance or pay a fine.”

He said it makes no sense for Michigan-based makers of medical devices – which will start paying a 2.3 percent tax in 2014 to help pay for the law – to see their taxes not used for the exchange.

But Rep. Anthony Forlini, a Republican from Macomb County’s Harrison Township, is on the fence. He expressed concerns that the government-run marketplace will undercut private insurance agents and wondered if it would be better to send all calls related to the health care law to federal officials.

“I’m trying to figure out how to get to a yes,” Forlini said.

Many business groups friendly to Republicans support appropriating the $31 million grant, but conservatives and tea party groups oppose it along with Snyder’s call to expand Medicaid under the Affordable Care Act.

Grassroots in Michigan founder Joan Fabiano said if legislators turn down the money, they can thwart the federal government’s move to carry out the law.

“It’s highly unlikely at this point that a federal government that is in debt and out of money has the means to implement it in well over 20 states that are refusing to implement it themselves,” she said.

A Senate budget subcommittee plans to get a similar update on the health exchange Thursday. Snyder wants a spending bill sent to his desk by the end of this month, and it is unclear when or if lawmakers will act.