March 21, 2017

The Honorable Debbie Stabenow

U.S. Senate
731 Hart Senate Office Building
Washington, DC 20510

Dear Senator Stabenow,

As Congress considers legislation to repeal and replace the Affordable Care Act and reform
Medicaid, I want to ensure you are aware of the impact that changes may have on beneficiaries
in Michigan who rely on these programs for access to care and overall health. I also want to
provide my perspective on priorities for federal health reform and highlight how they have been
utilized at the state level to drive meaningful reform that has increased access to cost-effective
care.

In its current form, the American Health Care Act (AHCA) shifts significant financial risk and
cost from the federal government to states without providing sufficient flexibility to manage this
additional responsibility. The proposed legislation reduces federal resources that our state relies
on to assist 2.4 million Michiganders enrolled in traditional Medicaid and the Healthy Michigan
Plan, our states innovative Medicaid expansion program.

The current federal debate has largely focused on the Medicaid expansion population, including
over 650,000 childless adults and parents that are enrolled in the Healthy Michigan Plan.
However, half of all children in Michigan are served by traditional Medicaid each year.
Moreover, more than 338,000 individuals with disabilities receive their health care and support
services through Medicaid. Altogether, there are 1.75 million children, seniors, pregnant women
and disabled individuals served by traditional Medicaid in Michigan. As you know, these are
our states most vulnerable citizens, friends and neighbors. The proposed AHCA will adversely
impact them.

While reforming the nations health care system is vital, it is imperative that gains in health
coverage and access to care are maintained. These ideas are not mutually exclusive.

In Michigan, innovative approaches to improving quality and value are being utilized to support
each individuals personal responsibility for their health. This has resulted in significant
reductions of nearly 50% in uncompensated care, a dramatic decrease in the number of
individuals using the emergency room as a regular source of care, and nearly 85% of enrollees
taking part in annual primary or preventive care visits. As drafted, the AHCA would eliminate
coverage from the 650,000 individuals enrolled in the Healthy Michigan Plan, as Michigan
taxpayers assume responsibility over time for up to $800 million in additional costs. This cost
shift will trigger a provision in Michigan law ending the Healthy Michigan program.
I believe Medicaid reform is necessary, however, that reform must be approached deliberately to
ensure that state flexibility and innovation are valued, Michigan providers remain strong, and our
most vulnerable citizens do not fall through the cracks. Ideally, this would be done by removing
prescriptive program requirements that require states to seek waivers when implementing
innovative ideas. Instead, states would be given performance based outcomes with federal
involvement only when performance is lacking.

If Congress moves forward in passing the AHCA which shifts financial risk to state taxpayers,
my administration and the Michigan Legislature must possess the flexibility necessary to manage
that risk. The Trump Administration may provide additional flexibility to states, however, I am
concerned that federal agencies may encounter limitations in federal statute. Ultimately,
Michigan cannot rely solely on the promise of future action without seeing all of the tools that
will be at our disposal to manage the program.

In addition, under the proposed AHCA, I remain concerned about the affordability of insurance
coverage in the individual market. I am particularly concerned about the impact this legislation
may have on older Michiganders who could see significant cost increases.

I welcome the opportunity to partner with you to provide greater federal budget predictability
and improve health outcomes of Michiganders, which in turn relieves pressure on other social
programs. I have worked with other Governors to develop a proposal to accomplish these
objectives while also preserving coverage for Michiganders, and I hope this can serve as a
blueprint for you as we work together to accomplish these goals.

I look forward to continuing our partnership to help Michiganders lead healthy and productive
lives.

Sincerely,

Rick Snyder
Governor