Medicaid Expansion

Maine DHHS analysis of the MaineCare expansion debate

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Despite being rejected five times previously, once again, a push to expand MaineCare—the state’s Medicaid program—will be debated. For the sixth time, the LePage Administration and this Department will stand against it

The truth is Maine has already experienced the devastating consequences of expanding Medicaid under previous Administrations. When Maine expanded in 2001 and again in 2003, it led to annual shortfalls in MaineCare of $50 million to more than $100 million. As a result, the state stopped paying its bills, racking up hundreds of millions in debt owed to Maine’s hospitals.

We cannot afford to abandon the sound financial management that exists within the program today that has directed resources to our elderly, disabled, and has allowed the state to responsibly manage without a perpetual financial crisis. The Maine Department of Health and Human Services has refocused the program on its neediest and most vulnerable beneficiaries by funding our nursing homes, strengthening home care options and providing services to those with intellectual and developmental disabilities that had been languishing on waitlists.

Currently, the Legislature cannot afford to care for our neediest and most vulnerable, it will only get worse if expansion is passed. Governor LePage’s biennial budget sought increases of $46 million in funding to reduce waiting lists for services for the intellectually and developmentally disabled; $28 million to expand access to primary care; and $22 million to adequately fund Maine’s nursing homes. Ultimately, the Legislature only funded a portion of these requests (e.g., $16 million for the waitlists), leaving considerable funding requirements in the program for our neediest and most vulnerable. These would only worsen if Maine chose to add thousands of able-bodied childless adults to its Medicaid rolls.

Medicaid expansion backers ignore key facts when it comes to discussing Medicaid Expansion.

Expanding MaineCare would cost Maine taxpayers approximately $315 million over the next five years. Despite claims that expansion is free—it is not. MaineCare accounts for 24 percent of Maine’s General Fund. Over the next two fiscal years, expansion would cost nearly $100 million, or enough to fund the Department of Marine Resources, Department of Labor, Department of Environmental Protection, and Department of Defense, Veterans and Emergency Management over that period of time.

Costs would continue to rise from there:

By 2021, the additional funds needed for Medicaid expansion could fund nearly half of the University of Maine’s annual budget.

Expansion would not affect children or pregnant women. MaineCare enrollment peaked at 354,000 in 2011. Today, enrollment is approximately 282,000. Medicaid expansion would allow childless, able-bodied adults into the program and increase eligibility for parents of dependent children.

An overlooked fact is that any individual who earns at least 100 percent of the federal poverty level is eligible to purchase heavily subsidized health insurance on the federal exchange. Simply put, most childless, able-bodied adults and all parents have access to subsidized health insurance under the current system.

There are options for the uninsured. Currently, the only Mainers who are not eligible for Medicaid or subsidized health insurance are able-bodied, childless adults earning less than 100 percent of the federal poverty level– $11,770 in 2016.

For those uninsured, federally qualified health centers provide no-cost healthcare to low income individuals without insurance. They receive enhanced rates in other areas like Medicaid reimbursements. Hospital-owned physician practices also provide care to anyone regardless of ability to pay.

Expansion would not solve the drug epidemic. Medicaid Expansion supporters argue that expanding Medicaid is the key to resolving Maine’s substance abuse problem. There is no evidence this is true. Maine already funds more than $20 million annually on treatment and prevention for the uninsured, and expansion states like New Hampshire and Vermont have some of the highest fatal overdose numbers in the country. The latest data from New Hampshire’s medical examiner shows that 414 people suffered fatal overdoses in 2015, up from 326 in 2014 and 192 the year before.

Due to underestimated enrollment and overly optimistic savings projections, numerous expansion states are facing significant budget shortfalls.

  • Vermont: The state now projects a $30 million shortfall for the current fiscal year and a $60 million gap in the next fiscal year due to Medicaid expansion.
  • Massachusetts: The state Medicaid caseload spiked in fiscal year 2014, leading to an increase in spending of more than $1.1 billion. While the federal government covers a significant portion of Medicaid costs, the expense paid by state taxpayers was $5.1 billion, up from $4.7 billion in 2013.
    • “The administration is taking several other steps to rein in costs, including holding flat most of the rates paid to providers and moving more MassHealth members into managed care plans, in which the state pays insurance companies set budgets to coordinate the care of patients.” (Boston Globe, January 28)
  • New Mexico: The state projected large savings as a result of Medicaid expansion. Those savings have not materialized, leaving a Medicaid shortfall of $85 million in FY 2017. As a result, the state likely will cut reimbursement rates to hospitals, doctors and social workers, as well as increase copays for those patients in the government insurance program.
    • “What we’ve done, unfortunately, is double down on borrowed money to pay for the state operating expenses,” said Rep. Brian Egolf, a Santa Fe Democrat who serves as the House minority leader.” (The Santa Fe New Mexican, February 18)

As this issue is debated once again, it is important to remember the financial crisis our state was in less than 10 years ago and how our neediest and most vulnerable paid the price. As well as the hundreds of millions of dollars it would cost Maine taxpayers over the next decade.

About Department of Health and Human Services

The Department of Health and Human Services, under the leadership of Commissioner Ricker Hamilton, serves approximately one-third of the people of Maine. DHHS provides health care and social service support to children, families, the elderly, the disabled, people with mental illness or substance abuse issues and the poor.

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