State may have to end benefits for 70,000 Michigan adults if feds won’t OK bailout

About 70,000 of Michigan’s poorest adults may lose their health care benefits unless the federal government signs off on a state plan to pay for the benefits with $200 million in surplus funds for uninsured children.

If Michigan can’t use the money, it will have to come up with an additional $30 million from its tight budget — or discontinue the Insurance plan, leaving thousands of people without access to health care.

The program pays for doctor’s visits, out-patient hospital services, emergency room visits and most prescriptions for the poorest of the poor — people with annual incomes of about $3,100 or less, many of whom are homeless.

Harry Walter, 41, of Dearborn Heights doesn’t know what he’ll do without the State Medical Program, which provides benefits to care for the crippling back injury that has kept him out of work since July.

“I was doing well in my business until this happened,” said Walter, a self-employed landscaper who now needs a walker to get around. “(Doctors) don’t ask you what your name is any more; they ask you what your insurance is.”

Gov. Jennifer Granholm wants to tap federal money that was set aside for the MiChild program, which provides health insurance for children of the working poor. State officials say the federal government overestimated how many children would qualify for the insurance, leaving Michigan with a $200 million surplus. Nationwide, $11 billion has gone unused.

But federal officials claim the money isn’t really a “surplus” because if it’s not used after three years, it goes into a pot from which other states can draw. About $3.2 billion in unused funds has been redistributed to 18 states since the program started in 1997.

Faced with a $900 million deficit and Michigan’s stalled economy, state lawmakers counted on using the MiChild money in the 2003-04 budget adopted in October, even though federal officials had not yet approved the plan.

“We got verbal authorization from the head of the (federal) program,” said Paul Reinhart, Medicaid director for Michigan.

Getting waivers

Arizona, Illinois, Oregon and New Mexico already have received waivers from the U.S. Department of Health and Human Services to divert surplus funding for uninsured children to other programs. But the department has not made decisions on similar requests from Michigan and Arkansas.

State officials say the agency is stalling on Michigan’s proposal, raising the possibility that federal officials want to head off a raid on the funds.

“We’re looking for the same consideration that other states have been given and if the federal government does not grant the waiver, it is the federal government saying no to health care for 70,000 Michigan residents,” said Liz Boyd, the governor’s spokeswoman. “We’re very concerned that the federal government seems unresponsive.”

Mary Kahn, spokeswoman for the federal Centers for Medicare and Medicaid Services in the Department of Health and Human Services, wouldn’t comment on reasons for the delay, but talked about the agency’s criteria for granting such waivers.

“(The federal program) was originally intended to serve children, the disabled and the aged. Able-bodied, middle-aged people were not the intended target of this program,” Kahn said.

Child advocacy groups, including the Child Welfare League of America, claim there are still millions of uninsured children who should benefit from that money.

“The money should really go for what it was designated for: children. There are many children still in Michigan who don’t have health insurance. Nationwide, the numbers are increasing primarily because there is less employer coverage,” said Barbara Allen, a senior government affairs associate with the league.

No patience for delay

Ibraham Ahmed Ph.D. R.N. has little patience for the delay. He is the founder and executive director of ZIAD Healthcare for the Underserved, a network of medical professionals that provides low-cost or free health care to about 6,000 low-income Wayne County residents. ZIAD doctors receive either the small cash payments their patients can afford, or provide their services for free. Ahmed, who is unpaid, said the ZIAD physicians are bracing for the throngs who will join the ranks of the uninsured if the State Medical Program is cut.

“If the program is dead, all of these people go to the street for health care. And these are the sickest people. If they don’t get their health care, it will tax the system, and you will see more hospital closures,” Ahmed said.

That also concerns Linda Dicks, spokeswoman for the Michigan Health & Hospital Association. Hospitals already spend millions on unreimbursed care for the indigent and have suffered reduced payments from the Medicaid program, which primarily insures impoverished children and mothers.

The ailing Detroit Medical Center has struggled with losses of more than $400 million over the past six years, much of that because of uncompensated medical care for the poor at Detroit Receiving and Hutzel hospitals. The DMC threatened to close Receiving, the city’s only trauma center, and significantly cut services at Hutzel by the end of the summer if it did not get additional government aid. The crisis was averted when state lawmakers agreed to a $50 million bailout.

“It’s a very real possibility that some hospitals could close if the program completely went away and there was no funding at all,” Dicks said.

A spokesman for the DMC said they are currently assessing what the financial impact would be.

‘Very depressing’

The State Medical Program — known as either Plus Care or Care First in Wayne County, where about 50,000 people are signed up — covers doctor’s visits, emergency care and and some prescription drugs.

The program is funded through a special waiver from Medicaid. Under Michigan’s proposal to use the MiChild funds, the state also wants to expand services to include mental health.

The program, which uses either a green MiHealth card, or a white paper card issued for Wayne County’s Plus Care and Care First programs, doesn’t cover inpatient hospital care and other services.

Still, the program helps defray costs.

Cecile Ghanel, 46, of Dearborn has Plus Care benefits that help pay the cost of her prescriptions and doctor visits. Still, her 24-year-old daughter, Jennifer, contributes about $100 per month from her pay as a pharmacy technician to pay for her mother’s uncovered medical expenses.

The two don’t know what they will do if the card is taken away.

“It’s very depressing. What am I going to do? I take 17 pills a day,” Cecile Ghanel said.

Ahmed, of ZIAD Healthcare for the Uninsured, said if the State Medical Program is cut, patients like Ghanel will not take their medicine, and they will end up in the hospital with high blood pressure, high blood sugar, infections and a host of other ailments.

“I take medicine every day,” explained Akram Assi, 47, of Dearborn. “If not, my sugar would go high,” putting her sight at risk or causing other complications.

You can reach Karen Bouffard at (313) 561-9646 or