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State lawmakers look to patch Medicaid shortfall, say long-term solution critical

Michigan’s Medicaid program faces a budget shortfall this year of more than $100 million. That’s because a new tax on health insurance claims is not producing as much revenue as state officials expected.

This week, the state Senate passed a mid-year budget bill that would patch that hole in the Medicaid budget. That’s the same bill that includes $100 million dollars to help fix and maintain roads being torn apart by nasty winter weather.

Senate Appropriations Committee Chair Roger Kahn, R-Saginaw Township, says the Health Insurance Claims Assessment (HICA) needs to be replaced to make sure health insurance for low-income Michiganders is not at risk.

“Shame on me for letting this get out in 2014 with that hole in it,” said Kahn. “I’m not going to let it get out in 2015 with the same hole in it. We have to find a more permanent way to fix this.”

“That is a large shortfall,” said Angela Minicuci, a spokesperson for the Michigan Department of Community Health. “$114 million would essentially not be going towards our Medicaid program, and we would have to work out how we would have to address that within the department budget.”

Minicuci agrees a long-term fix is needed.

“There is certainly a structural problem,” she said. “This isn’t just a one-year solution.”

Kahn says he hopes to introduce legislation soon to replace the HICA tax with something more reliable.

A new bill that would overhaul Michigan’s controversial auto no-fault law also includes money to patch the Medicaid shortfall. Drivers would have to pay a $25 fee on each individual auto insurance policy to help pay for the program.

State House Speaker Jase Bolger says that would be a workable long-term solution to the problem.