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An Open Letter to the Michigan Legislature: Oppose Gov. Snyder’s Call for Medicaid Expansion

February 8, 2013

Dear Legislator:

On behalf of National Taxpayers Union’s 362,000 members nationwide and over 11,900 members in Michigan, I urge you to oppose the expansion of Medicaid under the federal health care law, which will place hundreds of thousands of additional Michiganders into a broken program that will cripple state and federal budgets.  

As a result of the Supreme Court’s June 2012 “Obamacare” decision, states have the option to increase their participation in this failing program, and right now, taxpayers are depending on you to say “no.” Medicaid is already plagued with low reimbursement rates and payment delays, as well as rampant waste and fraud. According to the Centers for Medicare & Medicaid Services (CMS), the improper payment rate in 2011 was 8.1 percent, amounting to $21.9 billion – the second-highest of any federal program reporting such data. By adding hundreds of thousands of people to the Michigan Medicaid rolls, these figures are certain to rise.

Even though President Obama has promised that the federal government will pick up the entire tab for the first three years and 90 percent of the cost in the long term, Medicaid expansion will still saddle Michigan with an $883 million budget burden through 2022. This assumes the federal government will not renege on its 90 percent funding commitment. As you may know, President Obama has already proposed a reduction in federal match rates starting in 2017. If major tax hikes are to be avoided at the state level in the near future, Medicaid should be reformed to achieve cost savings, not enlarged.

The law will also have disastrous effects at the federal level. According to a recent report from the Kaiser Commission on Medicaid and the Uninsured, full-scale Medicaid expansion will cost the federal government $800 billion between now and 2022. In a separate study, the Heritage Foundation determined that if Governor Snyder gets his way, the federal government would spend an extra $12.9 billion in the state on Medicaid. However, that money is not “free”: current and future Michigan taxpayers would still have to bear part of this burden (and that of other state expansions) on their federal tax returns. Instead of increasing the size and reach of the federal government, state officials should seize this opportunity to rein in Washington’s dangerous spending habit.

By calling for expansion of Medicaid under the health care law, Governor Snyder has let down Michigan taxpayers and disappointed many more across the country. Such a move would make Michigan a co-owner of the federal government’s dramatically more intrusive role in the health care system and demonstrate true fiscal irresponsibility. Taxpayers are counting on your leadership on this issue.      


        Lee Schalk
        State Government Affairs Manager

        cc: Governor Rick Snyder