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Final 2006 Michigan Department of Community Health Budget More Generous Than Advocates Feared

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Final 2006 Michigan Department of Community Health Budget More Generous Than Advocates Feared
Issue 29, Autumn 2005

Final 2006 Michigan Department of Community Health Budget More Generous Than Advocates Feared

by Alison Hirschel, MPLP Elder Law Attorney


After months of political wrangling and draconian proposed cuts to the 2006 Medicaid budget, the final MDCH budget is far more generous than lobbyists and advocates expected. Nearly all of the program cuts and new program requirements for recipients in the Senate-passed and House-passed DCH budget bills were not included, and even a few of the cuts by the Governor were restored.

Among the most important outcomes:

  • Despite previous proposals from the House and Senate, the budget does not cut the $100 million funding for the MI Choice Home and Community Based (HCBS) Waiver program. However, waiver agents are required to reduce administrative costs by $2 per person per day and use those savings to increase enrollment in the program and provide additional services. Some waiver agents believe this reduction in administrative expenses could have a significant negative impact on their ability to manage the program;

  • Requires a report by the Department on the number of nursing home patients discharged who subsequently enroll in MI Choice. The budget anticipates a $1.3 million dollar savings from these changes and those savings are to be added to the MI Choice budget;

  • Restores most of the funding to the Office of Services to the Aging (although significant cuts included the total elimination of funding for senior center staff; and cuts to senior volunteer programs and the line item that funds care management; alternative care, in-home services, and access services);

  • Restores Caretaker Relative Medicaid eligibility;

  • Restores eligibility for 19-20-year-olds;?

  • Permits the state to work with the federal government to create an “estate preservation” program consistent with the recommendations of the Governor’s Medicaid Long Term Care Task?Force (and no longer refers to “estate recovery.”);

  • Includes new co-payments for Medicaid recipients - $1 for outpatient services, $2 on physician services, $3 on emergency room visits and $50 on the first day of an in-patient hospital stay. The co-pays are expected to raise $2.3 million in new revenue.

  • Requires the department to report by April 30, 2006, on the progress of the three Medicaid long-term care single point of entry services pilot projects.

  • Restores adult dental, podiatric and chiropractic services;

  • Partially restores hearing and vision screening programs; and

  • Reduces provider reimbursement cuts from 4% to 3%.

    Many observers fear that the budget is not entirely realistic and assume the Department will have to seek significant supplemental appropriations to cover shortfalls later in the fiscal year. Moreover, a number of issues that may have a dramatic effect on the budget are not yet resolved including whether the federal government will approve the Medicaid waiver application submitted by the Granholm administration earlier this year.

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