Medicaid Expansion

Funding Medicaid expansion requires tough choices to avoid the pitfalls of the past

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I have laid out four basic principles to guide the Legislature’s decision on how to pay for Medicaid expansion. We must maintain the state’s long-term fiscal health and avoid the budget disasters of the past.

DHHS estimates the cost of Medicaid expansion will be about $63 million in fiscal year 2019 and $82 million in 2020. It will rise to $97 million in 2021, then jump to more than $100 million every year after that—and the price tag will continue to grow.

Maine taxpayers will spend more than $450 million in just five years, just for the state’s share of Medicaid funding. The federal government is supposed to provide 90 percent in matching funds for some of the new Medicaid recipients, but the rest will be reimbursed at about 60 percent.

DHHS has estimated the number of new enrollees at about 82,000. However, if we look at Maine’s previous experience with expansion—and the other states that expanded Medicaid—it is indisputable that enrollment numbers are consistently under-estimated.

In Michigan, costs skyrocketed by 72 percent, and the cost per enrollee surged by 86 percent. Ohio has a similar story to tell. Connecticut is cutting Medicaid for 68,000 seniors and people with disabilities.

Other states facing financial disasters from Medicaid expansion include Illinois, California, West Virginia, New York and Hawaii.

States that expanded Medicaid under ObamaCare are seeing costs that have soared far beyond their projections. Maine’s Office of Fiscal and Program Review does not take that into account. The estimates from DHHS are much more realistic.

We must fund Medicaid expansion in a way that is sustainable and ongoing. We cannot reverse all the progress we have made to get Maine’s financial house in order.

Therefore, my principles are as follows:
1. No tax increases on Maine families or businesses.
2. No use of the Budget Stabilization Fund, and no use of this year’s money that will be directed to the fund.
3. No use of other one-time funding mechanisms or budget gimmicks.
4. Full funding of our Section 21 and 29 waitlists, and no reduction of services or funding for our elderly or disabled populations.

Liberals in the legislature want to rush ahead and implement Medicaid expansion without funding. But DHHS cannot hire and train an additional 105 staff without money. We cannot pay the state’s share of the new enrollees’ medical bills without funding.

Many legislators were in office the last time Maine expanded Medicaid. They rang up a $750 million debt to the hospitals, then did some tricky accounting to say the state had balanced the budget. We are not going back to those days of financial shenanigans.

The ball is in the court of the Democrats, the hospitals, the advocacy groups and the wealthy out-of-state special interests who campaigned for this referendum. They claimed that adding 80,000 people to a taxpayer-funded entitlement program will save money.

Now it is time to take them at their word. Show me the savings!

About Paul LePage

Governor Paul LePage (R) has served as the 74th Governor of Maine since 2011. Prior to his time as governor, LePage served as the general manager of Marden's and as the mayor of Waterville.

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