The Traverse City Area Chamber of Commerce supports Medicaid expansion in Michigan. Why? Because it’s good for business and our community. “Medicaid expansion” is linked to the federal Affordable Care Act (ACA). Each state must decide whether to keep Medicaid eligibility rules the same, or expand Medicaid eligibility to 138 percent of the Federal Poverty Level ($26,344 for a family of three in 2012). State legislators are currently debating whether to expand Medicaid.
This is a complicated issue, and some background information is important. To qualify for Medicaid, individuals in Michigan must be at or below 100 percent of the Federal Poverty Level and belong to one of these specific groups: children, parents, pregnant women, people with severe disability and seniors. Non-disabled adults without dependent children are generally excluded from Medicaid coverage in Michigan, no matter how poor they are.
Medicaid expansion would cover all households at or below 138 percent of the Federal Poverty Level, and eliminate the other criteria. In the five-county Grand Traverse area alone, almost 12,000 adults would benefit from Medicaid expansion.
How does this impact northern Michigan businesses? Under the ACA, businesses with at least 50 full-time equivalent employees must offer their full-time workers affordable health insurance that provides certain “essential benefits” or pay a penalty. However, employers do not pay the penalty if their employees obtain coverage under Medicaid. Medicaid does not charge a premium on either the employer or employee in this situation.
With Medicaid expansion, a full-time employee who earns $12 an hour and is the sole breadwinner for a family of three — a scenario not uncommon in northern Michigan - would qualify for Medicaid. Expansion would also cover many part-time employees who would not otherwise have health insurance through their employer.
Medicaid expansion is also good for the state’s bottom line. Expansion means the federal government will fund Medicaid services currently paid by Michigan taxpayers. This will total approximately $1 billion in federal funds to Michigan over the next 10 years. Federal funds will cover 100 percent of the state’s expansion costs in 2014, 2015 and 2016. After 2020, federal funds will cover 90 percent of the state’s expansion costs. Without Medicaid expansion, premiums for businesses that offer health insurance could increase to compensate for this loss of funding.