Michigan will likely have a federal health insurance exchange instead of a joint state-federal partnership after the state Senate last week recessed for spring break without meeting a federal deadline.

Also last week, a House subcommittee rejected a Medicaid expansion provision that is allowed under the new federal health care law as it began crafting an early version of a 2014 budget.

Michigan Gov. Rick Snyder is pushing for both the Medicaid expansion and a joint state-federal health care exchange. The governor has said both would save the state money.

Snyder proposed the Medicaid expansion as part of his fiscal 2014 budget. He said it would save the state $200 million annually during the early years when the federal government covers 1005 of expansion costs. He also proposed depositing $103 million into a newly created health savings account in case future costs are higher than expected.

Republican legislators are generally opposed to the Medicaid expansion, and the draft budget crafted last week by the House health budget subcommittee left the expansion out. Both sides, however, say it’s still early in the budget debate. The state’s fiscal year begins Oct. 1, though legislators have a self-imposed June 1 deadline to approve a final spending plan. 

A state-based or joint state-federal health insurance exchange, however, appears unlikely after Senate Republicans last week missed a key deadline to qualify for federal funding to set up the exchange. The move means the state will likely default to an exchange run entirely by the federal government.

“I think there are just real concerns that the federal government is not prepared to enact what they forced at us,” Senate Majority Leader Randy Richardville, R-Monroe, was quoted as saying in local reports.

Snyder said the state will still have to spend $8 million to connect Michigan customers to the exchange.

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