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Snyder Bets on Spurned Health Exchange to Help Detroit Retirees

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Michigan Governor Rick Snyder
Michigan Governor Rick Snyder’s fellow Republicans have been hostile to an exchange. The governor’s appeal for a state-run program died in the Michigan Senate this year. Photographer: Scott Eells/Bloomberg

Aug. 26 (Bloomberg)-- Michigan Governor Rick Snyder wants to reduce bankrupt Detroit’s costs by moving municipal retirees to insurance exchanges created under President Barack Obama’s health-care overhaul. His fellow Republicans, who dominate the legislature, aren’t making it easy.

A plan promoted by Kevyn Orr, the city’s emergency manager whom Snyder appointed, would require former workers not under Medicare to switch to exchange policies from city-paid coverage. Yet lawmakers squelched Snyder’s plan to run and market the U.S. Affordable Care Act in the ninth-most-populous state, where 1.3 million -- 13 percent of the population -- are uninsured.

“Nobody knows what’s going to happen,” said Don Taylor, president of the Retired Detroit Police and Fire Fighters Association. “They say open enrollment starts Oct. 1. Nobody knows what to do. The state doesn’t know. The city hasn’t done anything.”

Most Americans are required to have insurance beginning Jan. 1 under the federal law, which let states opt out of setting up exchanges with subsidized coverage for the poor and those of middle income. The U.S. government will run Michigan’s, along with those of 26 other states that wouldn’t create their own. Health-care advocates, who are mounting campaigns to enroll residents in the system starting Oct. 1, say they lack money for advertising and count on word of mouth to reach the uninsured.

Charting Course

“No question we are going to miss folks,” said Don Hazaert, director of Michigan Consumers for Health Care, a coalition that advocates taking advantage of the law’s opportunities. “The vast majority who are eligible for health-care coverage don’t know it. Someone has to explain it for them.”

Hazaert’s coalition of about 250 organizations is among four “navigator” groups that will divide a $2.5 million federal grant for outreach programs in Michigan.

A separate $3.7 million from the U.S. Health and Human Services Department was given to 31 health centers to help enroll people. The clinics serve 600,000 patients a year, and about one-third of them are uninsured, said Rebecca Cienki, chief operating officer of the Lansing-based Michigan Primary Care Association.

A state-run program would have had its own office, computers and website in addition to a larger marketing budget, said Caleb Buhs, spokesman for the state Insurance and Financial Services Department.

Snyder plans a hotline for consumers to ask about the new health-insurance network, said Sara Wurfel, a spokeswoman.

Unto Death

A functioning exchange is one key to Orr’s plan to restructure $18 billion of debt that burdens the city of 700,000, a former automobile-manufacturing capital that has been in decline for decades. Unfunded liabilities for retiree health-care are $5.7 billion, Orr has said, so shifting costs to the U.S. would take a burden off the city, which filed a record municipal bankruptcy July 18.

Retirees would get a monthly stipend of as much as $250 to help pay premiums. Orr also proposed reduced benefits for retirees who qualify for Medicare, the federal insurance program for people over 65 and the disabled.

Yet Snyder’s fellow Republicans have been hostile to an exchange. The governor’s appeal for a state-run program died in the Michigan Senate this year.

“People were still a little in shock that Obamacare was really coming and didn’t want to help it,” said Republican Majority Leader Randy Richardville, who said he supported an exchange.

Poor Health

Senator Bert Johnson, a Democrat who represents part of Detroit, agrees with Orr’s plan for retirees. He said the lack of support for an exchange shows how the state shirks responsibility.

“Republicans continue to be caught up in ideology and not necessarily rooted in sound public policy,” Johnson said.

Neither has the legislature agreed to Snyder’s entreaties to expand Medicaid, the joint federal-state insurance system for the poor, as Obama’s law permits. Medicaid covers 1.8 million Michiganders, of whom 1.1 million are children, said Angela Minicuci, a Community Health Department spokeswoman. A larger program may add 477,000 residents, most of them working adults.

The Senate may vote on the issue this week, and Snyder is determined to get it approved, Wurfel said.

“He’s going to focus on the outcome and what he can do to clear through the clutter,” Wurfel said.

Beating Streets

Meanwhile, Oct. 1 draws near and, with it, the federally run exchange.

To help get word out, Washington-based Enroll America is enlisting volunteers in Michigan, among 10 states where the nonprofit organization has paid staff, said state director Erin Knott. The nonpartisan group, whose leaders include members of Obama’s election campaigns, promotes the new law. Knott said teams are knocking on doors and arranging informational events.

Consumers Mutual Insurance of Michigan, a nonprofit cooperative created to accept Affordable Care Act customers, is distributing 2 million fliers and even refrigerator magnets.

“We’re five weeks away and we’ve got to reach a lot of people,” said David Eich, a spokesman.

To contact the reporter on this story: Chris Christoff in Lansing, MI

To contact the editor responsible for this story: Stephen Merelman at

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