Updates About Budget

Governor Gretchen Whitmer delivered a major address on Michigan’s economy last week, underscoring the vital role that middle class jobs have played in the state’s success. She pointed to recent progress that includes adding or retaining nearly 1,000 jobs across multiple municipalities that led to a $200 million boost to the state economy. Whitmer also spoke on securing a fighter mission for Selfridge Air National Guard Base protecting 30,000 jobs and nearly a billion dollars in statewide commerce. She outlined long term investment projects in infrastructure, childcare, housing, and education made possible through bipartisan cooperation, noting that more than 1,500 bipartisan bills have been signed to support working families and strengthen communities.

The governor also raised concerns about what she called a “man-made storm of uncertainty” caused by chaotic national tariff policies and delays in finalizing a state budget. Consequences of this storm include rising prices on groceries and household goods for families, while steep costs, outsourcing, and lower sales threaten Michigan farmers and automakers. Without action, she warned, progress on roads, schools, and public safety could be rolled back, putting thousands of good-paying jobs at risk. Whitmer closed her speech by reminding lawmakers of the value in working across the aisle to sign a balanced budget. What should this compromise look like? According to the governor, a signable budget covers Senate priorities to protect Medicaid, feed kids at school, and support moms and babies and also includes House priorities like cutting spending, fixing local roads, and increasing transparency.

On July 4, 2025, the One Big Beautiful Bill Act of 2025 (OBBBA) was signed into law. As a result, Michigan is facing significant and concerning updates to its Medicaid and SNAP programs that will have wide-reaching effects on residents’ health and access to essential services. These changes are expected to reduce coverage and support for many vulnerable populations.

The Supplemental Nutrition Assistance Program (SNAP) supports over 1.7 million Michigan households, helping prevent food insecurity. Key changes include:

• Low-Income Home Energy Assistance Program (LIHEAP) deduction may reduce SNAP benefits
• Internet Expense Deduction removed
• Work Requirements: Waiver for Able-Bodied Adults Without Dependents (ABAWDs) is being rolled back, requiring more individuals to work or face SNAP loss
• Changes to Immigrant Eligibility: Certain refugees and asylees previously considered eligible may have benefits reduced or terminated
• Enrollment Frequency: Enrollment for SNAP may now occur every six months, instead of annually
• Error Rate-Based Funding Cuts: States will be required to pay a portion of SNAP benefits based on their Payment Error Rate (PER), effective FY28
• Administrative Cost Shift: Federal funding for SNAP administration will decrease from 50% to 25% starting FY27, requiring Michigan to cover 75% of administrative costs

Medicaid currently provides coverage for roughly one in four Michiganders and is a critical lifeline for low-income residents. Major updates include:

• New work requirements for Healthy Michigan Plan (HMP):
  • Applies to enrollees ages 19-64
  • Must work, train, or volunteer at least 80 hours per month to maintain coverage
  • Many exemptions and exceptions
  • Effective January 1, 2027
• Six-month redeterminations instead of renewing eligibility annually
• Retroactive eligibility Limits (previously 90 days prior to application):
  • HMP: Coverage now only 30 days prior to application
  • Other Medicaid programs: Coverage now only 60 days prior to application
  • Effective January 1, 2027
• Fewer coverage pathways for non-citizens
  • Some lawfully present non-citizens may receive Emergency Services Only (ESO) coverage
  • Lawful permanent residents remain eligible
  • No longer eligible: Refugees, asylum grantees, trafficking victims, and more
  • Effective October 1, 2026
• Financing and Provider Changes:
  • Insurance Provider Assessment (IPA) tax to be discontinued
  • Gradual reduction of provider tax cap
  • State Directed Payments (SDP) to providers now capped at Medicare rates (replacing prior commercial-rate cap)

For a full review of the projected impacts of these changes on Michigan residents, see this Medicaid and SNAP Impact presentation by MDHHS shared during a Senate Appropriations committee hearing.

As Medicare and Medicaid reach their 60th anniversary, Governor Gretchen Whitmer and Lieutenant Governor Garlin Gilchrist are celebrating the sweeping impact the programs have had on Michiganders while also raising alarm over recent federal threats to their future. These landmark health care programs now cover more than one in four state residents, providing essential care for children, seniors, people with disabilities, and low-income families. Whitmer credited Medicaid and Medicare with reducing poverty, supporting rural hospitals, and keeping costs down for working families.

At the same time, Whitmer and Gilchrist sharply criticized recently passed federal legislation that cuts nearly $1 trillion in Medicaid funding, which would eliminate health care for many here in Michigan. With nearly 2.6 million Michiganders relying on these programs, including 1 million children and three in five nursing home residents, Whitmer and Gilchrist have pledged to keep fighting for access to affordable care, even as Congress moves in the opposite direction.