Earlier this year, Governor Whitmer signed an executive directive, directing the Michigan Department of Health and Human Services to identify the potential impact that proposed Federal cuts to Medicaid would have on the state. Overall, according to State Budget Director Jen Flood, the proposed Medicaid cuts could result in a $2 billion hole in Michigan’s budget.
That report was released this week and looks at current proposals that have been floated around Congress.
Impact:
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- If they reduce federal matching rates, more than 700,000 Michigan residents (approximately 30% of Medicaid beneficiaries) would lose health care coverage.
- If health care coverage for Michiganders too sick to work is terminated, the price tag to administer the reporting requirements program would cost taxpayers an additional $75 to $155 million per year.
- If provider tax reforms are passed, there would be a $2.3 billion decrease in payments to Michigan hospitals and upwards of $325 million less in payments to nursing homes.
- If there are changes to per-capita/block grant funding, there would be a $4.1 billion to $13.4 billion loss over the next 10 years.
Medicaid in Michigan:
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- More than 2.6 million Michigan residents are covered by Medicaid-enrolled providers.
- Jointly funded by the state and federal government, Michigan’s Fiscal Year 2025 Medicaid budget is approximately $27.8 billion.
- A majority of this funding, around 70% (or $19 billion), comes from the federal government.
Healthcare in Michigan:
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- Michigan’s health care industry has a total economic impact of $77 billion per year.
- Medicaid expansion alone sparked the creation of more than 30,000 new jobs.
- These jobs boost the personal spending power for Michigan residents by about $2.3 billion each year, resulting in approximately $150 million more in annual tax revenue.
To read the full report, please click here.
