3 days ago
Michigan Senate panel hears input on potential devastation of federal Medicaid cuts
Katie O'Neal (right) testifies before the Senate Health Policy Committee as it discusses proposed federal Medicaid cuts on Wednesday, June 5, 2025 | Photo by Ben Solis
As Republicans in Congress pursue massive cuts to federal Medicaid dollars, Michigan lawmakers have been left to decipher what that means for the state and its residents who rely on vital health care funding.
On Wednesday, members of the Michigan Senate Health Policy Committee met to discuss the U.S. House of Representatives' recently passed spending bill that would slice $535 billion from the federal program over the next 10 years.
Testifying before the Democratic-controlled Michigan Senate committee were members of the Michigan Department of Health and Human Services, hospital officials and federally qualified health care providers.
Meghan Groen, senior deputy director of health services with the MDHHS, said one in four Michigan residents rely on Medicaid and that a significant portion of those recipients live in rural areas.
The U.S. House proposal to cap and eliminate provider taxes would cost Michigan around $525 million, Groen said, and the proposed work requirements in the federal spending bill could lead to a $155 million implementation cost with less coverage provided. Groen noted that nearly 500,000 people could face coverage loss.
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One of the benefits of Michigan expanding Medicaid coverage many years ago was that health insurance could be provided to more low-income residents and reduced the financial burdens on hospitals. Eliminating the Medicaid expansion could lead to increased emergency room visits and higher health care costs overall.
'The Healthy Michigan plan involves about 750,000 Michiganders. At this point, it succeeded in exactly what it was intended to do,' Groen said. 'It prevents people from going into bankruptcy and medical debt, because someone in their family got sick. Uninsured people don't stop getting sick. They wait until they're sicker, and then they go to an emergency room. They go with a higher level of care, where it's more expensive to serve them, and their acuity, or how sick they are, is more intense at that time, so it costs more.'
If they don't have money to pay that bill, Groen said, it gets left unpaid, and the providers have uncompensated care. She said the cost for everybody in the community goes up everybody who goes into that provider.
Sen. Sylvia Santana (D-Detroit) wondered about the work requirements, noting that the Institute of Health Policy and Innovation has said that 49% of Michiganders who fall into that category are already working.
Groen said the state does not have an exact number of how many in that population were actually working, but she suspected it would be most recipients. Adding the proposed requirements would lead to a lot of extra communication about recipients go on to comply with the requirement, which also say they needed to be working the month before they applied.
'It might be a little confusing for an individual who's like, 'great, I just got a job, I'll apply for Medicaid,' and then to get that determination letter [saying] that they, in fact, do not meet the requirements is going to be very confusing for people who are just reaching out, getting a job, and trying to make sure they have health care for themselves and their family,' Groen said. 'We are very concerned about both what the compliance looks like for individuals who are working and individuals who are not.'
Also testifying was Katie O'Neal, a mother from Ypsilanti, who extolled how Medicaid helped her child get lifesaving care and without going through the rigors of dealing with the modern health insurance industry.
O'Neal's son, Nathan, who came to their family through the foster care system, was born 11-weeks premature. He was eligible for Medicaid due to his inclusion in foster care. Shortly after he arrived as a member of the O'Neal family, Nathan became ill with RSV, a common respiratory virus that can have serious consequences for infants and older adults. It was later discovered that he had a stenosis, or narrowing, of his lower airway, requiring a tracheostomy.
All of that care was covered by Medicaid, O'Neal said, which was a blessing. Years later, Nathan's airway needed to be reconstructed. A two-week intensive care unit hospital stay was necessary at a cost of more than $100,000. That procedure and follow up appointments were all covered by Medicaid.
He lives a pretty stable life now, despite a resurgence in complications from the reconstructive surgery, which is rare. Four procedures have commenced since late last summer, and each of those procedures were covered by Medicaid.
But future surgeries and complications could be harrowing if congressional Republicans' cuts to Medicaid take hold.
'I have anxiety about the outcome and his life after surgery. I worry how first grade will go, and I wonder if we will ever escape this cycle of airway procedures,' O'Neal said. 'But I don't have to worry about convincing my insurance company that it's necessary. Medicaid has been there for us at every turn, and now there's a public debate about whether families like mine should still have this kind of support with Medicaid.'
