Michigan is one of 27 states that chose to expand Medicaid under the Affordable Care Act. Enrollment in “Healthy Michigan Plan” (HMP) began April 1, 2014, and six months later more than 400,000 uninsured citizens have gained coverage—many for the first time.
Eligibility for HMP is based on the Federal Poverty Level (FPL). Income for an individual must be below 133% of FPL to be eligible for Healthy Michigan. For 2015, FPL for an individual is $11,670, and 133% of FPL is $15,521.
Federal Poverty Level is an imperfect system; it does not reflect a living wage in 2015, and is insufficient for individuals or families to afford their basic needs. FPL is the same across the country, and does not take into account differences in cost of living from state to state. Its last major adjustment was in 1975. An individual earning less than $11,670 is below the FPL. Some who earn more than FPL remain in poverty, with income insufficient to cover their basic needs for food, medical expenses, transportation, child care, etc. The recent ALICE Report by the United Ways of Michigan shows that 40% of the state’s families do not have income adequate to meet their basic needs.
This year, Michigan’s legislature raised the minimum wage to $8.15 per hour, increasing it over four years to $10.50. For calendar year 2015 it remains at $8.15 per hour. At this rate, a full time worker with a minimum wage job will earn $16,952.
Unfortunately, Michigan’s new minimum wage makes full-time workers ineligible for Healthy Michigan Plan. Eligibility income limits are set at 133% of FPL or $15,521. Full time earnings for a minimum wage worker are $16,952. Even if we use 138% of FPL, or $16,105, a full time, minimum wage worker still earns too much to be eligible for HMP. (ACA allows the use of 138% to determine eligibility if Modified Adjusted Gross Income, “MAGI,” which allows some deductions, is used as the base income.)
To be eligible for HMP, a minimum wage worker cannot work more than 36.6 hours per week. ($15,521 / $8.15 = 1904 hrs/yr / 52 weeks = 36.6 hrs/wk.)
This means that full time minimum wage workers who signed up for Healthy Michigan Plan in 2014 will probably lose their newly won coverage at renewal time in 2015. Free clinics and other health care safety net providers who worked so hard this year to get their clients enrolled, will find at least some of them once again uninsured in 2015, “bumped off of Medicaid” because they make too much money to be eligible. Loss of Healthy Michigan insurance coverage is not healthy for Michigan’s citizens nor for its economy.
What can be done to prevent this loss? Reducing Michigan’s minimum wage is not the answer. At $8.15/hour, it is not a living wage, and needs to be increased. It appears that the problem has to be addressed at the federal level. ACA’s 133% of FPL could be increased. Or, even better would be a major overhaul of the Federal Poverty Level, so that it reflects a level of income that allows households to meet their basic needs.
We must find a solution, so that we do not lose the progress made in covering Michigan’s uninsured. Insurance coverage is essential to the health of our state, and we must continue to work for “Health Care for All!”
– Mary Ellen Howard, RSM, Public Policy Advocate, Cabrini Clinic, Detroit
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