By Eric Lupher/President, Citizens Research Council of Michigan
Credit: Creative Commons
The Citizens Research Council (CRC) recently addressed how the state may be impacted by federal policy changes. By extension, these changes will affect county and municipal finances and may cause you to reorder budget priorities.
We described the role that Medicaid plays in providing health insurance for 23 percent of all Michigan residents and the consequences of the federal policy changes aimed at reducing spending by reducing Medicaid participation. These changes will leave a growing population of people without health insurance. Some may become less healthy because of delayed health care. Others may face increased financial hardship to afford the care they seek. The changes may also imperil the finances of local hospitals, particularly in rural areas, and other categories of health providers.
We identified budget pressures in the state budget created by provisions of the federal One Big Beautiful Bill Act. These include restrictions on the state’s tax on hospitals levied to enhance Medicaid reimbursement to hospitals and help defray state General Fund costs; the pending elimination of the state’s Insurance Provider Assessment tax; new/increased state cost sharing obligations for SNAP (the former Food Stamps program) and Medicaid; and the impact of federal tax law changes on state revenue. With state policymakers prioritizing road and education needs, these unanticipated budget pressures will imperil funding for higher education, state revenue sharing, and state services.
Federal policy changes also affect the Affordable Care Act’s (ACA) private marketplaces. Changes were made to the enrollment and eligibility verification process for ACA marketplace plan enrollment, and enhanced tax credits that subsidize the cost of private coverage were not extended. These changes will make it more difficult for individuals and families working low-wage jobs to afford health insurance, which will likely result in delayed health care and/or increased financial hardship to afford the care they do receive.
Lastly, we addressed the consequences of changes to federal vaccination recommendations that are likely to make it harder for many people to obtain certain vaccines without incurring out-of-pocket costs.
How does this affect your county? First, as seen in recent weeks, county revenue sharing’s long-term stability is uncertain. Cost pressures will stretch on for several years.
Second, the health care needs of your residents will undergo changes that could impact your county budgets. With fewer families covered by Medicaid, county health services may take on greater importance.
Specifically, demand for county delivery of vaccines may grow. County health departments are required to “continually and diligently” seek to prevent disease, prolong life and promote public health through organized programs directed at environmental health hazards, specific diseases and, especially, vulnerable population groups.
If the finances of hospitals and other health providers are imperiled and vaccine access becomes challenging, counties may be asked to fill the void. Your county residents may need to travel longer distances for emergency and clinical care, but by empowering county health clinics to better provide preventive care, such as vaccines, those residents may find local care.
Counties are situated to serve those without insurance by working with childhood vaccine programs and the Michigan adult vaccine program. There may be a nominal fee for some people, but much less than the normal cost of vaccine.
I fear county officials may be confronted with difficult budget decisions in the coming months and years. By understanding the totality of the changes, affecting county finances and your residents’ access to health care, you can be strategic in adapting to the changes.