CHICAGO — The Michigan Senate late Tuesday narrowly approved an expansion of the state's Medicaid program under the new federal health care law.

The approval comes after months of opposition from Republicans who control the Senate, and is considered a major victory for Gov. Rick Snyder. The Republican governor has made the expansion a top priority and spent the summer touring the state, lobbying lawmakers for the expansion.

The Senate voted 20-18 to pass House Bill 4714. It failed by one vote on the initial attempt, and passed the second time with less than half of Senate Republicans supporting it. The House, which passed an earlier version of the bill in June, is expected to vote on the Senate measure next week.

"This issue has prompted strong opinions and the debate has been intense at time," said Snyder, who held a press conference Tuesday night. "Vigorous discussions are a natural part of our form of government and I respect everyone who has been involved in this process and appreciate the positions and views that they put forward. That vigorous discussion has resulted in an improved Healthy Michigan plan that will better serve the state and its people."

For Detroit, expanding the Medicaid program could prove key to emergency manager Kevyn Orr's restructuring plan. Orr wants to shift the retirees onto the federal exchange program to bring down retiree health care obligations. The expansion will mean $1.7 billion in federal funding in 2014 and save $206 million next year by using federal money for services that are now covered by state funds, according to Snyder.

The move will provide nearly 500,000 Michigan residents with health insurance. The current program covers 1.8 million Michiganders.

Supporters, including the state's hospital association, said the expansion would alleviate 90% of the $880 million in annual uncompensated care claimed by Michigan hospitals.

Snyder included the expansion in his $51 billion 2014 budget, but it was not included in the final $49 billion spending plan. As part of the expansion, Snyder wants to deposit $103 million into a newly created health savings account that would grow over the next several years to help Michigan cover the expected increase in costs when the state takes over more of the cost of the expansion in 2020.

Twenty-three states and Washington, D.C., have so far have agreed to expand their Medicaid programs under the new law.


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