Allumbaugh: Medicaid needs reform, not expansion



In choosing not to accept the federal Medicaid expansion, Gov. Paul LePage and key legislators in Augusta have acted prudently. Certainly, the prospect of receiving millions more dollars in federal assistance to prop up the state’s ailing program was hard to resist. But for MaineCare, the priority must be to make the program affordable for the long haul — so that 10 or 15 years down the line, Maine still can offer the most vulnerable a health care safety net.

When it comes to Medicaid reform, Washington would do well to make Augusta’s priority its own.

For all its “promises” of improving health care, the Affordable Care Act (Obamacare) does nothing to improve the long-term sustainability of Medicaid. Instead, it would pile upward of 16 million more people nationally onto that ever-expanding welfare program.

If all states were to expand Medicaid coverage to include those declared potentially eligible under Obamacare, one-in-four Americans will be on Medicaid within 10 years — at a combined cost of $831 billion in state and federal spending by 2021.

America simply cannot afford that. With $16 trillion in debt, the federal government cannot fulfill the Medicaid promises it has already made, much less make good on those same promises for 16 million more people.

[RELATED: Medicaid expansion means millions for House Speaker’s boss…]

Even President Obama has acknowledged that Medicaid can’t go on “as is.” His fiscal year 2013 budget proposed a “blended” match rate as a means to reduce the federal share of Medicaid costs. Not surprising, with much riding on coaxing states to accept the Medicaid expansion, the administration claims it no longer supports its “blend rate” proposal, perpetuating the misleading idea that Medicaid’s fiscal future is sound.

As the Washington money starts drying up, the states will be stuck with the challenge of trying to make ends meet in Medicaid. And that will be a huge problem for Maine. One in four Downeasters are already on MaineCare. The Maine Department of Health and Human Services estimates that — if the Obamacare expansion is embraced — the state’s MaineCare costs would reach $150 million annually by 2020.

Even today’s funding shortfalls have led the state to cut payment rates to MaineCare providers. Reduced reimbursements inevitably drive providers out of the program, leaving vulnerable populations with less access to care and services. An expansion would not fix that problem. Indeed, it would worsen it, adding more people to a system already experiencing a shortage of service providers. With that dynamic, longer wait times and lower-quality care are all but inevitable.

The Obamacare Medicaid expansion tries to convince states they can simply sign up for a new, federal credit card, with no-interest payments for the first few years. However, unlike the federal government, states face the real challenge of balancing their budgets. Augusta’s rejection of this new deal not only protects the checkbooks of Maine’s taxpayers, it sends a strong signal back to Washington that it is time to quit the charade.

Medicaid needs reform, not expansion. Real reform will protect the health of those who are most in need and most vulnerable. It will expand choice, promote competition, improve the quality of care, and ensure fiscal sustainability. Although Obamacare papered over these much-needed changes, states can act now by advancing reforms within their current Medicaid programs. Such action will begin to pave the way toward true patient-centered, market-based health care reforms.

Maine made the right call. It has looked past the hollow promises of Obamacare. Rather than expand MaineCare into a bigger, costlier program delivering lower quality health services, Augusta now has the freedom to enact real reforms that can deliver better care to those it already serves.

Joel Allumbaugh is director of the Center for Health Reform Initiatives of the Maine Heritage Policy Center.


  1. The Affordable Care Act has just caused my small business health insurance provider to stop covering my employee after January 2013. No more small buainess plans for Maine. Thanks for the “change”.

  2. The only issue not mentioned in Joel’s piece is the fact numerous reimbursements written in Obamacare are funded through reductions to current programs – therefore, the hospitals and mental health providers, and for that matter, primary care and specialists are likely to see reimbursements curtailed beginning in 2014. 100% participation by states was expected in this legislation and the 3 years of 100% funding for the expanded program projected to provide state’s sufficient time to fund year four and beyond. Once again we see a half-truth out of the conservatives with a new unacknowledged underfunding crisis looming shortly into 2014.

  3. Medicaid AND Medicare need reforms…………… of the type that reduces benefits and the number of people “on the dole”. It should not be free to nearly everyone, but only for those who are elderly or handicapped, AND (not or) are incapable of getting family, private, religious, or local assistance.


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