- Associated Press - Sunday, July 19, 2015

LANSING, Mich. (AP) - Enrollment in Michigan’s expanded Medicaid program is a quarter higher today than what officials thought it would be five years from now, which will squeeze the budget when the state starts paying in 2017. Here’s a look at the cost of offering health insurance coverage to more low-income adults:

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BIG ENROLLMENT

Initially, Gov. Rick Snyder’s administration projected 323,000 enrollees in the first year and 477,000 by 2020. But more than 15 months after the launch of “Healthy Michigan,” 600,000 have signed up - 25 percent above the peak estimate in 2020. Officials expect enrollment to hover between 585,000 and 615,000 here on out. Enrollment in the traditional Medicaid program has declined, however, in an improved economy.

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WHO PAYS

The U.S. government is covering the cost of expanded Medicaid for the first three years under the federal health care law. Michigan, like it already does with regular Medicaid coverage, must start contributing in 2017. It will pay 5 percent that year, phasing up to 10 percent in 2020 and each year after.

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THE COST

The Snyder administration originally estimated the state would pay $718 million for Medicaid expansion through the 2019-20 budget year, a range of $100 million in year one to $270 million in the fourth year. Now the estimate is $840 million, between $150 million the first year and $300 million in year four.

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THE IMPACT

Michigan today spends more than a quarter of the $9.9 billion general fund - its second-largest account besides education - on Medicaid. Officials expect the ratio to hold flat in coming years despite the program’s expansion. But earmarking an extra $300 million a year for the expansion by decade’s end will squeeze the budget. The Legislature is debating whether to shift more general funds to road repairs. Lawmakers could later consider cutting Medicaid provider rates. Another option is reducing optional Medicaid services, though some programs are designed to contain costs by preventing pricier stays in hospitals or nursing homes.

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ANXIETY?

Snyder, a proponent of Medicaid expansion along with Democrats and some Republicans, has touted the higher-than-expected enrollment. He says offering insurance to more poor people will make them healthier and minimize their expensive trips to the emergency room, reducing hospitals’ uncompensated care costs and saving money throughout the health system. It remains early to say if the law is working as intended in that respect. The state budget office continually analyzes Medicaid caseloads and is planning for the additional enrollees, spokesman Kurt Weiss said. Conservatives who opposed the expansion have warned of the price tag.

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WHAT’S NEXT

The Snyder administration is seeking a federal waiver needed by year’s end so the expansion can continue beyond April 2016. It would require adults enrolled in Healthy Michigan for four years to buy private insurance through a government exchange or pay more for health coverage. If the Obama administration grants the waiver, Snyder and the Republican-led Legislature would first budget expansion costs for the fiscal year starting October 2016.

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Follow David Eggert on Twitter: https://twitter.com/DavidEggert00

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