Senate Republicans Passed Fiscal Year (FY) 2007 Budget Proposal (Senate Bill 220) & Gov. Granholm Released FY 2007 Executive Order Cuts

Read this Action Alert and then contact your state House member IMMEDIATELY to urge them to reject Senate Bill 220.

Members of the Michigan House of Representatives

Senate Republicans FY 2007 Budget Proposal; Gov. Granholm FY 2007 Executive Order; Key Messages; and Sample Letter to Legislators

To coordinate your hospital/health system's advocacy efforts, please contact your Hospitals-ACT Project Coordinator before responding to this alert.

Senate Republican Budget Proposal Slashes Health Care Funding

On Thursday, negotiations between Gov. Granholm and legislative leaders stalled on how to resolve the state’s current budget shortfall of nearly $900 million.  Ignoring the need for an agreement with the state House and the governor, the state Senate passed, on a straight party line vote, a budget proposal that included cuts to health care, education, revenue sharing and economic development. 

Under the Senate Republican proposal (Senate Bill 220), health care received the largest General Fund (GF) cut.  In total, funding to the Michigan Department of Community Health (MDCH) was cut by more than $65 million, with an estimated impact to Michigan hospitals of $13.4 million.  The proposed cuts include:

1. Elimination of all payment increases allocated to physician services in FYs 2006 and 2007, including primary care physicians and obstetricians.
2. Increasing the cost-sharing for optional populations, including the potential for raised co-pays, deductibles and premiums.
3. Increasing the state’s gainsharing under the Hospital Quality Assurance Assessment program.
4. Cutting all Medicaid provider rates by 1%, effective May 1, 2007 for the remainder of the current fiscal year.

While the hospital community recognizes the deep and worsening budget crisis facing our state, the Senate Republican cuts have been passed at a time when Michigan hospitals are struggling to maintain the safety net for the state’s approximately 1 million uninsured and 1.5 million Medicaid recipients.

Action Pending in the State House

It is critical that Hospitals-ACT and MHA members contact their state representative TODAY to urge them to reject Senate Bill 220.  To locate your state representative, visit our Legislative Action Center and select My Elected Officials.  For instructions on how to use the action center, click here. 

On a related note, the full Senate Appropriations Committee unanimously approved the governor’s revised Executive Order to further address the FY 2007 state budget deficit through additional cuts, reductions in delayed payments and adjustments to retirement benefits. Funding to the Michigan Department of Community Health was cut nearly $25 million, with an estimated impact on hospitals of at least $2 million (GF).

The Executive Order is now sent to the full House Appropriations Committee for consideration.  Unlike appropriations bills, the governor’s Executive Order needs only to be approved by a simple majority of the House and Senate Appropriations Committees to become effective. 

The MHA continues to work with Gov. Granholm and legislative leadership to protect Medicaid funding and the health care safety net for all Michigan residents.  For our advocacy efforts to succeed, members of the state House need to hear from you, too! The unfortunate actions taken by the state Senate increase the importance of your grassroots involvement. Please contact your state representative TODAY to urge them to reject Senate Bill 220. 

If you have any questions, please contact David Finkbeiner, vice president, advocacy or Lori Latham, senior director, political and public affairs, MHA.  Thank you.