Feds Send Mixed Signals on Sequester, Medicaid

Two letters from the Obama administration to Republican Gov. Paul R. LePage paint very distinct portraits of the federal government’s fiscal health amid sequestration and Medicaid expansion.

“It is my hope that all states will fully expand their Medicaid programs and take advantage of the generous federal matching funds to cover many of their currently uninsured residents,” wrote Health Secretary Kathleen Sebelius in a March 5 letter, a copy of which was obtained by The Maine Wire.

That same day, Deputy Health Secretary William V. Vorr sent a separate letter warning that sequestration would cut funding for Maine’s Department of Health and Human Services (DHHS) and deprive 300 Maine children of access to Head Start and Early Head Start programs.

“As you are likely aware, due to the failure of Congress to reach a deal on a balanced deficit reduction to avoid sequestration, a series of spending cuts called sequestration will cancel approximately $85 billion in budgetary resources across the federal government for the remainder of the federal fiscal year,” wrote Vorr.

“This action will result in sizable reductions in the amount of funding for health and human services provided directly to Maine and to its various localities and service providers,” Vorr wrote.

“In the context of sequestration, an estimated 300 children in your state are expected to lose access to Head Start and Early Head Start services as a result of a reduction of $1.6 million in funding,” wrote Vorr.

“The impact would be felt by community and faith-based organizations, small businesses, local governments, and school systems forced to lay off teachers, teaching assistants, and other staff,” Vorr wrote.

According to Vorr’s letter, sequestration will cause a five percent reduction in most programs receiving direct funding from the federal government, including $368,000 less funding for Social Security block grants and $334,000 less for Substance Abuse Prevention/Treatment.

So, while sequestration is drying up funds for Maine’s other DHHS-administered projects, which will in turn cause teacher layoffs and steal educational opportunities from children, the federal government is flush with cash for Medicaid expansion.

Read both letters below:

By S.E. Robinson
Maine Wire Reporter

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