Senate Health Policy Dedicates Nearly 2 Hours To Medicaid Hearing

(Source: MIRS.news, Published 06/05/2025) Possible restrictions on Medicaid, as laid out by the U.S. House's budget reconciliation bill, is "an American genocide on our people" says Sen. Sylvia Santana (D-Detroit), chair of the Senate's budget-making subcommittee for health and human services.

"Never, ever, ever in my time in office, did I imagine we would be having this conversation at this juncture, when, under a Republican-led governor and legislature, we expanded the Healthy Michigan Plan," Santana said. "We've been through a 100-year pandemic with COVID, and to me, the taxpayers around this state and around this country have overwhelmingly said they do not want cuts to Medicaid and access to healthcare for all."

Santana was referring to how, during Republican Gov. Rick Snyder's administration, the Republican-controlled Legislature approved expanding Medicaid's eligibility scope in Michigan. In exchange for accessing larger federal matches that were offered as an incentive to do so, eligibility in Michigan went from 35 percent to 133 percent of the Federal Poverty Level (FPL) around 11 years ago.

In late May, the U.S. House moved a mega-bill to the Senate bankrolling higher U.S. Border security and tax cuts. As the plan looks to downsize federal spending over the next 10 years, it looks to tighten Medicaid eligibility and states' use of "provider taxes," which have been accused by critics of inflating states' Medicaid matches from the federal government.

Wednesday, the Senate Health Policy Committee heard testimony for almost two hours about the U.S. House Republicans' Medicaid proposals.

Speaking about provider taxes was Meghan Groen, the senior chief deputy director of health services for the Michigan Department of Health and Human Services (DHHS).

She explained that because Medicaid tends to pay less than commercial insurance on services, "provider taxes" are used to create an additional pool of money to give extra boosts to facilities treating many Medicaid beneficiaries.

"We have provider taxes for hospitals, for emergency services, as well as for nursing homes in the state of Michigan," Groen said. "The House bill changes how provider taxes are structured. They cap them. They say we can't have any new ones. They also eliminate two provider taxes that are long-standing in the state of Michigan."

In Michigan, the taxes on providers range from 5.01 percent to 5.5 percent. States currently must tax within the "safe harbor" limit of under 6 percent, but the U.S. House Republicans' budget reconciliation bill would freeze taxes as they are, prohibiting new ones from being set.

"One of our nursing home provider taxes would be eliminated, both under the reconciliation bill as well as a (Centers for Medicare and Medicaid Services) rule that has been proposed," Groen said. "That is $685 million in those supplemental payments."

Additionally, the bill in Congress reduces the timeframe that facilities can be reimbursed prior to a patient being enrolled in Medicaid from three months to one. It also requires that Medicaid eligibility be redetermined every six months, instead of annually.

Also, according to DHHS, it requires states to distribute Medicaid in a way not exceeding Medicare payment levels, instead of Michigan's present-day practice of basing payments on average commercial rates.

One of the individuals worried about the proposed changes was Jeremiah Hodshire, the president of Hillsdale Hospital.

In more than 109 years of operations, Hodshire's rural hospital has grown from a simple system, one originally where patients brought in canned goods in exchange for treatment. Now it's more complex, he described, with Medicare and Medicaid making up roughly 70 percent of what comes in the door.

"It is a safety net health care program that aided me and my family of seven growing up in rural Hillsdale County, the very program that now finds itself in the crosshairs," Hodshire said. "Not withstanding the medical devastation and the deprivation and care deserts and the lack of access to care, local economies across the country, and specifically here in Michigan, will be devastated."

He said that his hospital is the second-largest employer in the city of Hillsdale and the third largest county-wide.

Hodshire explained the change from three months to one for retroactive Medicaid payments will keep patients from obtaining long-term care services, resulting in increased emergency department visits that hospitals are obligated to attend to regardless of payment.

"It will shift to the individual hospitals as bad debt. It becomes my problem now," Hodshire said. "What types of programs would hospitals end up getting? Obstetrics, psychiatric care . . . and the list goes on and on."

Another testifier Wednesday was Katie O'Neal, a school nurse from Ypsilanti. She thought of her son, Nathan, who was born 11 weeks prematurely. O'Neal was not Nathan's biological mother. Instead, he arrived at their home through the foster care system at 7 weeks old, "tiny and fragile."

Within a month of his arrival, O'Neal said he became very congested and wasn't eating.

"I took him to the hospital. At the time, I didn't worry about who would pay for it or how much it cost, because he had Medicaid. In the emergency room he was diagnosed with RSV, intubated and admitted to the ICU. We lived there for the next two months," O'Neal said. "Doctors performed a tracheostomy, putting in a plastic tube right in his neck…they informed us that if Nathan pulled out his trach, he could die. If it got caught on something and came out while he was crawling around our home, he could die."

She said Medicaid covered a home nurse to supervise Nathan while she wasn't with him, as well as a truck full of medical equipment.

Three years later, it was determined Nathan should have his airway reconstructed. Because his adoption was nearly complete, O'Neal was able to learn through his patient portal that his two-week stay in the intensive care unit (ICU) cost more than $100,000.

"I couldn't even imagine how much his two-month stay had been when he was an infant," O'Neal said. "Because of Medicaid, my child, who could not speak a word until after he turned 3, can talk and tell jokes and yell at his little sister. Most people don't know he ever had any medical issues."

She said Nathan has had four procedures since February of this year, and she scheduled another one on Tuesday. Because of Medicaid, she said she's been able to focus on her child instead of fighting with an insurance company.

"I wonder if we will ever escape this cycle of airway procedures, but I don't have to worry about convincing my insurance company that it's necessary. Medicaid has been there for us at every turn," she said. "I get to laugh with him about how hard subtraction is, because Medicaid taught him how to learn (that) he's adamant that addition is easier."

According to polling conducted from April 28 through May 3, with a 600-person sample and a plus-minus four-point margin of error, 54 percent of residents believe Medicaid spending should be maintained as is by Congress.

The polling was done by the Lansing-based EPIC-MRA, and also found that 29 percent think federal Medicaid spending should be increased, and 11 percent think it should be decreased.