Commentary

Michigan’s Obamacare Medicaid Expansion Exceeds Projections by 22 Percent

Cost may be much more expensive than originally assumed

The Foundation for Government Accountability has just published a report on state enrollments under the Obamacare Medicaid expansion. Here’s what the authors say about Michigan:

When Republican Governor Rick Snyder lobbied the Michigan legislature to adopt his Obamacare Medicaid expansion plan, he too sold it on the promise of low and predictable enrollment. His office predicted no more than 477,000 able-bodied adults would ever sign up, with 323,000 signing up in the first year.

But more able-bodied adults enrolled in ObamaCare expansion in the first three months than the state thought would sign up during the entire year. Despite the fact that Michigan did not expand Medicaid eligibility until April, nearly 508,000 adults signed up by the end of 2014, far more than the state thought would ever enroll. Enrollment continues to climb, with nearly 582,000 able-bodied adults signing up by April 2015.

Like Michigan, many states accepted the Medicaid expansion because lawmakers were afraid to stand between their local hospital cartels and hundreds of millions of dollars in “free” federal money (statewide more than $3 billion annually for Michigan).

But starting in 2020 Michigan will have to pick up 10 percent of the total cost. The newly compiled figures suggest that this may cost a lot more than members of the House and Senate anticipated when they voted to take the money.

In 2013 the Senate Fiscal Agency, using similar assumptions to those of the Snyder administration, projected that the state would have to come up with $385 million in 2021 to cover its share. Supposedly this would be partially offset by savings realized from offloading some mental health and prisoner health care costs onto the federal budget, but given the actual enrollment figures reported by FGA, those plans may need to be revised.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

'Steve Cook' Bill Would Prevent Private Union Employees from Spiking State Pension

MEA president is basing public pension on $200K union salary

Two months ago, Michigan Capitol Confidential broke the story that the Lansing School District had allowed the president of the state's largest teachers union to remain on its payroll for years as part of a “pension spiking” scheme.

Last week legislation was introduced in the state Senate to prohibit such schemes.

As reported by Michigan Capitol Confidential, under an arrangement with the Michigan Education Association, the Lansing School District contributed $51,976 annually to the state-run school pension system on behalf of union president Steve Cook, and was then reimbursed by the MEA. The deal will let Cook collect a much larger pension from the school retirement system that is currently underfunded by $26 billion.

“While Steve Cook’s gaming of MPSERS was not illegal, it certainly was unethical,” said Sen. Marty Knollenberg, R-Troy, the sponsor of the legislation. “Cook enriched himself at the expense of our teachers’ retirement. It’s time to close this loophole to make sure MPSERS benefits go to those intended — our public school teachers and employees.”

Knollenberg's legislation, Senate Bills 279 and 280, is aimed at prohibiting such pension spiking deals, and would also ban school union contracts that pay employees who are union stewards to do union work on school time (a practice they call “release time”). In many public school districts, local union officials collect a full teacher's salary and benefits but are not required to teach or perform any other educational function.

As a state representative in 2011, Knollenberg introduced a version of this second bill after learning that 25 of the 28 school districts in Oakland County had either a full-time or part-time employee being paid with taxpayer money to perform union activities. That legislation (House Bill 4059 of the 2011-2012 session) was passed by the House with a 59-47 margin but was never taken up by the Senate despite a 26-to-12 Republican majority.

The current bills each have 14 cosponsors, a solid base of support to start out with considering that 19 “yes” votes are needed for passage in the Senate. Senate Bill 279 has been assigned to the Senate Appropriations Committee, which is chaired by Sen. Dave Hildenbrand, R- Lowell. Senate Bill 280 has been assigned to the Senate Commerce Committee, which is chaired by Sen. Wayne Schmidt, R-Traverse City, who voted for House Bill 4059 in 2011.

“Each dollar these school districts spend on union lobbyists is a dollar taken from classrooms,” Sen. Knollenberg said. “The last thing parents and taxpayers should have to worry about is whether money is being siphoned out of classrooms to pay for lobbyists.”

MEA spokesperson Nancy Knight didn't return a phone message seeking comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.