The erosion of Michigan’s gold-plated health benefits, long the envy of workers across the U.S., is accelerating the state’s downward economic spiral. Years of auto-industry layoffs and benefit cuts to white-collar retirees have left hundreds of thousands of Michigan workers without employer-provided health coverage. To adapt, individuals are drawing down savings to fund their own insurance, going without treatments or tests, or leaning on an increasingly strained state. The share of Michigan residents under 65 using public insurance such as Medicaid rose to 22% last year, from 11% a decade earlier.
These cutbacks, in turn, are devastating the health-care sector. Now the state’s largest employer, health-care providers have swung from profit to loss. Hopes are fading that Michigan’s hospitals and clinics can offset the car industry’s decline: Even as waves of former auto workers are retraining as nurses, dental hygienists and X-ray technicians, the state’s hospitals are freezing expansion plans and laying off workers.