Kahn wants to see the savings stay in health care and also favors Snyder’s past proposal to tuck away half so Michigan does not take a financial hit when the federal government stops covering the entire cost of the Medicaid expansion in a few years. He fears a health care vs. roads fight will ensue before year’s end.
“Instead of having a solid roads program and a solid Medicaid expansion program, we will have neither. It wouldn’t be the first time that the Legislature has tripped on its nether region,” Kahn said.
Another unresolved budget issue is that a tax on health insurance claims is bringing in $130 million a year less than expected. Without the money, Michigan could lose $400 million in a Medicaid match from the U.S. government.
That is the sort of risk legislators might try to attend to temporarily with money intended for roads or other funding sources. Budget gurus want a long-term fix to the problem to avoid coming back to the issue again in just a few months time.
“That’s just a one-time shot. We need a structural change there that we’re trying to work through,” said state budget director John Nixon.
He said there is an understanding that if issues such as the insurance tax shortfall are tackled, the Medicaid savings “will go into roads. That’s something we support.”
Nixon acknowledged the state must deal this fall with not saving as much money as expected in year one of an expanded Medicaid program.
“The bottom line is we got it done,” Nixon said. “We are where we are. We’re just going to move forward.”
Democrats, however, are taking every opportunity they can to remind the public that these tough headaches could have been avoided by offering health coverage to hundreds of thousands of residents in January rather than waiting until the expansion, thus delaying the process and leaving many residents uncovered for more months as winter nears closer.
“The casualties of your civil war are people,” Senate Minority Leader Gretchen Whitmer, D-East Lansing, said recently during comments directed at Republicans.