The full effects of COVID-19 from a personal, societal, business and political standpoint will take years to fully understand. However, one indisputable fact that we know right now is that for health insurers, the decrease in the use of medical services has resulted in a dramatic reduction in medical expenses. In fact, utilization of non-emergent health care services declined by 30-50 percent over the first half of 2020.
When Michiganders moved from the workplace to in-home quarantine, employment statuses changed, and income became uncertain for many. In response, Priority Health, and many other insurers, adjusted premiums and waived cost sharing for many important services and benefits. In the Affordable Care Act market, Priority Health was one of the first insurance plans in the nation to provide premium credits to small group and individual members. We worked quickly to ensure our members, friends, neighbors and fellow Michiganders could maintain their coverage.
The state is also looking for creative ways to support Michiganders. We saw another example of this with their request for health plans to return unused Medicaid funds. In August, the Legislature approved a proposal by Gov. Gretchen Whitmer’s Michigan Department of Health and Human Services to take back $35 million in funding by implementing the Medicaid risk corridor, which allowed the state to reduce payments to Medicaid health plans.
At Priority Health, we viewed this as a reasonable and responsible thing to do. We applaud the bipartisan work of the Whitmer administration and the Michigan Legislature on this budget solution.
The funds cut from the Medicaid program were reallocated to help the state tackle its $2.2 billion budget shortfall for the rest of fiscal 2020. Now, as the Whitmer administration and Legislature look to address budget shortfalls for fiscal 2021 and 2022 a continuation of the risk corridor is again on the table. Extending the funding mechanism into fiscal 2021 ensures that funding will stay in Michigan and help communities across our state as our legislative partners in Lansing work with the governor to navigate COVID-19’s impact.
This proposal hasn’t come without opposition. Numerous for-profit health plans, many headquartered out of state, have opposed these cuts. These same insurers are reporting record profits and shareholder dividends. At a time when unemployment in Michigan has increased to nearly 15 percent and the future for many Michigan families is uncertain, we should be coming together to find ways to give back, utilize rainy-day funds, and be a partner to both the Whitmer administration and the Legislature as they seek to find solutions to the unforeseen problems COVID-19 has created.
Claims that the quality of care for Medicaid recipients is at risk because of these cuts should be insulting to the people of Michigan. At Priority Health we are confident in our ability to continue providing access to high-quality, evidenced-based care. The quality checks that ensure Medicaid recipients across all plans have access to the care they need will still work.
Insurers have a responsibility to be good stewards of taxpayers’ dollars, to work hard to lower expenses and take action to reduce fraud, waste and abuse in Michigan’s health care.
We believe that we also have an obligation to operate efficiently to ensure that more money is spent on care and less on administration.
We all know the importance of pulling together and helping our neighbors, and this proposal to return unspent tax dollars provides Michigan insurers the opportunity to do our part. Let’s make decisions today that will best position Michigan to come out the other side of this crisis stronger and smarter.