Michigan Improves Medicaid & Helps Businesses

Medicaid and the business community may not sound like they have much to do with each other. The upgrades to Michigan’s Medicaid program, however, are achieving important business objectives, including controlling insurance costs and fostering a productive workforce.

Most people associate Medicaid with the unemployed. And it’s true that Medicaid supplies healthcare to the indigent. Medicaid is also the largest provider of long-term care for both the elderly and disabled individuals. But that’s only part of the mission.

Medicaid primarily helps working families. Three in four Medicaid enrollees, both adults and children, come from a family with at least one person active in the workforce. They go to a job and earn a paycheck, but it doesn’t come with benefits.

Lack of benefits is becoming more common. Different employment structures such as contract jobs, hourly work and “gig economy” arrangements are increasing; many of these structures lack health insurance, and the wage scale can make it tough for employees to afford private coverage.

Healthy employees remain a vital asset to Lansing’s economy, and this is where our state’s Medicaid enhancements come in. The Healthy Michigan initiative allowed more than 600,000 legal residents to buy Medicaid coverage at a price they could afford. The change caused a drop in the uninsured rate from 11 percent to six percent.

Today, more hard-working people obtain preventative care to avoid disease, check-ups to detect problems early and prescription medicines to control chronic conditions. This timely care is reducing overall health system costs. It’s also keeping employees well, so they don’t miss work days or leave a job due to illness or infirmity.

That’s great for Michigan companies, ranging from restaurants and retailers to construction outfits and farms. A healthier workforce is a more productive one, and businesses have noted the improvement.

The drop in the uninsured rate had another important effect: it slashed the health insurance tax businesses pay to subsidize medical care for the uninsured. Before Medicaid was upgraded, those without insurance would put off going to the doctor for financial reasons. They let health problems fester and would seek help in the emergency room, where care is then even
more expensive.

A substantial proportion of this urgent care went unpaid for, and it was bankrupting the healthcare system. To stay afloat, medical centers hiked rates on insured patients, which increased health insurance premiums for businesses; that took money from job creation and growth. Still, many hospitals went under, and many underserved communities lost their only provider.

Medicaid is reversing the trend. The program is now responsible for one-in-three dollars going to safety net hospitals in underserved areas. Reliable payments mean hospitals don’t have to continue raising fees, and the increase in health insurance rates can slow down.

Finally, Medicaid is building a better workforce for tomorrow. Making sure children have access to medical care, regardless of their family’s income, is fundamental. Kids who rely on Medicaid do better academically, they are more likely to graduate high school and they are less likely to suffer from chronic conditions or disabilities later in life. They even get better jobs at higher wages.

Today’s Medicaid-covered kids will be more educated, more capable employees tomorrow and will fuel Michigan’s economy for decades to come. They will also be less likely to depend on government assistance, so businesses and individual taxpayers will see savings down the road.

A majority of our state legislators and Governor Rick Snyder saw these advantages of enhancing Medicaid, and they acted accordingly. Four years later, businesses are glad they did; we only hope that they keep up the effort and the progress.

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