Many of you are wondering why it is so difficult to pass legislation that would fix our roads. Simple answer…some people insist upon it being about much more than roads. One of the sticking points in the most recent negotiations regarding a road solution featured the Health Insurance Claims Assessment (HICA) tax. “What does HICA have to do with roads” you say? HICA revenue goes to pay the state portion of Medicaid payments. OK…what does Medicaid have to do with roads? Stay tuned…first some background.
Do you remember the passage of Section 2001 of Obamacare in Michigan back in 2013? You may recall it being referred to as Medicaid Expansion or Healthy Michigan. The program has been promoted as a success because over 600,000 Michigan residents have enrolled in part due to incentives like the $50 Wal-Mart Gift Card that enrollees receive when they complete their paperwork.
Right now, the Federal government is covering 100% of the bill for these new enrollees through federal tax increases and the rationing of Medicare services. Starting in 2017, that coverage percentage starts dropping. Eventually, the federal government will only provide 90% of the costs meaning that the state will have to pick up the rest of the tab. That translates to around $300M per year of additional expenses for MI taxpayers.
So where do we get the extra $300M per year? When Medicaid Expansion was passed in Michigan, we were supposed to have a “savings lockbox” that would put away money ostensibly “saved” by passing Medicaid Expansion. As the September 4, 2015 Detroit News Editorial, “Obamacare proves a bad deal again” so eloquently pointed out, the “lock box” is empty.
What other options do we have? Well, one way is to increase the HICA tax rate. An increase in the HICA tax rate would offset the need for General Fund dollars in the Department of Health and Human Services (DHHS) budget. Another way is to continue the practice of the past two years and siphon off General Fund dollars to fix other flawed assumptions regarding Healthy Michigan. Neither of these approaches respect our taxpayers nor address the core issue of escalating healthcare costs.
That brings us back to the roads debate. You see, the same General Fund dollars that are needed to fix the runaway Medicaid Expansion costs have already been earmarked in bills passed by the Senate and the House to fix the roads with EXISTING funds.
Back on May 5th, 2015, 81% of Michigan voters emphatically said no to the Proposal 1 plan that increased taxes and mixed roads with other issues. As elected officials, it is incumbent upon us to respect the will of the people. We need to fix the potholes in our roads with a roads solution. We need to fix the potholes in Medicaid Expansion with a healthcare solution. In August, I am pleased to report that the MI House resisted a push to ignore the voters and blend the two issues.
The good news is that we have independent solutions available for each of these problems. A way to fix our roads without raising taxes was addressed in my August 7, 2015 Detroit News Editorial titled “Let’s find middle ground on road funding”. Our Medicaid Expansion issues could be solved by my Patient-Centered Care Solution (PCCS) which was first introduced at the time of the Medicaid Expansion debate in 2013. The key components of this solution have since been proven to work in the State of Washington and are being adopted in other states throughout the nation. Under my free market-driven healthcare solution, not only would Medicaid enrollees have access to higher quality, lower cost healthcare, so would the rest of our citizens. It is not too late to pursue either of these solutions.
It is time to decide where we go from here. Do we listen to the loud cry of Proposal 1 voters or do we go forward with politics-as-usual? It is my sincere hope that we will seek to restore respect for our system of government and listen to our citizens.