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Governor Snyder Releases Fiscal Year 2016 Budget Recommendation

Thursday, February 12, 2015  
Posted by: MPCA
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Yesterday, February 11th, Governor Rick Snyder released his fiscal year 2016 executive budget recommendation before a joint meeting of the House and Senate Appropriations Committees. The state's new fiscal year begins October 1, 2015. Included in the Governor's budget recommendation is $19 billion in total fiscal year 2016 funding for the Michigan Department of Community Health ($3 billion General Fund). Among the proposals are:

  • $21.8 million ($7.5 million GF) to expand the Healthy Kids Dental program to the three remaining counties of Kent, Oakland, and Wayne. With this expansion, 210,000 additional Medicaid-eligible children (0 through 8 years) will have dental coverage, bringing the total number of children covered under the Healthy Kids Dental program to 822,000. The remaining age groups in these three counties will be phased-in over the next several years.
  • $23 million ($7.9 million GF) in partial year funding to increase access to dental care for more than 600,000 existing adult Medicaid beneficiaries, through a new statewide managed care contract.
  • $32.1 million ($12.7 million GF) for the Mental Health and Wellness Commission’s recommendations for increasing access to behavioral health services.
  • It appears the primary care service line is funded at the same level as last year.
  • Investment of $3.5 billion in federal funds for the Healthy Michigan Plan to continue expanded Medicaid coverage. As of February 9th, 546,807 Michiganders have health coverage through the Healthy Michigan Plan, exceeding enrollment projections for the first two years. This program is helping 1 out of 20 Michiganders and has already provided for nearly 350,000 primary and preventive care visits.
  • Increasing the hospital provider tax (the Quality Assurance Assessment Program or QAAP) to fund the Graduate Medical Education (GME) program and rural and sole community hospital program. The use of QAAP revenue to provide State match instead of GF would reduce GF costs by $77.1 million. QAAP revenue has been used almost exclusively to fund general Medicaid hospital reimbursement. Using QAAP to fund large pools such as GME and the rural and sole community hospital program would represent a major shift in approach.
  • Increasing the Health Insurance Claims Assessment (HICA) from 0.75% to 1.3%. This would increase HICA revenue by $162.8 million and offset an equal amount of GF funding. Furthermore, the budget proposes elimination of the $450 million cap on combined HICA and managed care Use Tax revenue, for a further increase in revenue and GF savings of $17.3 million.
  • The budget also calls for continued funding of $3,557,300 for the Child and Adolescent Health Centers Program.

An executive budget revision will be issued to align the new Department of Health and Human Services budget. Governor Snyder created this new department by executive order on February 6th, merging the Departments of Community Health (MDCH) and Human Services (DHS). The executive order becomes effective April 10, 2015, and the MDCH/DHS budgets will be combined into one budget in May 2015.

To address the current fiscal year budget deficit, Governor Snyder also signed an executive order (2015-5) yesterday reducing fiscal year 2015 GF spending by $102.8 million and special purpose funds by $3.5 million. Included is a $16.5 million reduction to MDCH. Of that is a $2.9 million funding reduction for new initiatives associated with Mental Health and Wellness Commission recommendations, $5 million reduction in GF support for the Graduate Medical Education program, and $1.5 million GF reduction to local public health departments.

MPCA will continue to monitor the budget process and keep you updated via our weekly e-newsletter. If you aren’t currently subscribed to the MPCA eUpdate, click here to have it delivered to your email inbox every Tuesday.

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