Senate approves Shirkey’s Medicaid funding replacement

LANSING, Mich. — The Michigan Senate on Thursday approved Sen. Mike Shirkey’s legislation to reduce health insurance costs and enact a reliable source of funding for the state’s Medicaid program.

“It is finally time to end Michigan’s burdensome and costly Health Insurance Claims Assessment,” said Shirkey, R-Clarklake. “This legislation would provide substantial relief to individuals and businesses who purchase health insurance while also ensuring our Medicaid program has consistent funding to adequately meet the health care needs of struggling families.”

Senate Bills 992-994 would repeal the state’s Health Insurance Claims Assessment (HICA) and replace it with a new Insurance Provider Assessment (IPA) that would assess Medicaid providers — who benefit from the Medicaid program — at a higher rate than commercial insurance. Other states have adopted a similar concept with success.

Shirkey sponsored SB 994, which would create the new IPA. The bill would lock commercial rates into law and provide flexibility for the state to meet federal Medicaid requirements.

The bill would require a federal waiver of at least five years to provide stability to the state and commercial insurers.

“This is a long-term, sustainable solution to the highly complex problem of funding Medicaid,” Shirkey said. “The plan offers a better, fairer and more stable revenue source for Medicaid and also helps reduce the cost of health insurance for Michigan families and small businesses.”

Under the Senate bills, every commercial insurance provider who currently pays HICA would pay less, and self-funded plans and dental providers would be completely exempt.

SBs 992-994 received near-unanimous support in the Senate and have been sent to the House of Representatives for consideration.