Medicaid Expansion In Any Form Bad for Maine

(Editor’s Note: The Portland-based Press Herald newspaper refused to publish this opinion editorial, written by Rep. Deb Sanderson (R-Chelsea), the top Republican on the Legislature’s Health and Human Services Committee. It appears here in full. For an explanation click here.) 

I don’t blame many people for thinking expanding Medicaid in Maine under ObamaCare sounds like a great idea at first glance.  Free money from the federal government?  More people covered by free health insurance?  Where do we sign up?

However, when you dig deeper and examine the fine print, as well as Maine’s past experiences with welfare expansion, you quickly begin to have second thoughts.

Medicaid expansion entails Maine putting 70,000 or more able-bodied adults on medical welfare at a massive cost to the state.  Both the legislature’s nonpartisan budget office and the Department of Health and Human Services (DHHS) have put the net cost to state taxpayers at tens of millions of dollars per year.  An independent analysis ordered by DHHS puts the figure as high as $125 million per year.

Like a pitch-man in a late night TV infomercial, proponents of welfare expansion are telling Mainers to “act now,” take advantage of a special introductory offer, and don’t worry about the long-term.  They’re even trying to tell us we can drop out after three years if we don’t like it.

But what they don’t tell you is what happened the last time Maine bought this bill of goods.  We expanded Medicaid in the late 1990s and early 2000s.  Since then, Medicaid spending has doubled as a share of our state budget, increasing from 13 to 25 percent of all state spending.  By 2024, even if we don’t expand again, we’re estimated to spend a whopping 36 percent of all our state tax revenue on Medicaid.

Proponents of past expansions promised that we’d see lower emergency room usage, less charity care provided by hospitals, fewer uninsured Mainers, and more.  All of those things have proven to be demonstrably false.

They told us that it wouldn’t cost much at all, but their estimates were shattered.  In addition, federal matching rates have been slashed, further burdening Maine taxpayers who already rank sixth in the nation for their tax burden.

Perhaps more important than charts in a budget document or unrealized policy promises are the real toll this welfare bonanza has taken on the average Mainer.

The growth of Medicaid spending has meant less funding for other critical state services.  There are 3,100 severely disabled people on wait lists for Medicaid services.  DHHS will likely never find the money to help them if we put 70,000 more able-bodied young adults on the system.  Medicaid was designed for children, the disabled, pregnant women, and the elderly in nursing homes.

The more we expand free coverage to a population that is 60 percent male, 60 percent under the age of 45, 75 percent single, all able-bodied, all of adult working age, and 42 percent addicted to tobacco products, the less money we will have to take care of the truly needy.

We see the cannibalizing effect of welfare spending in other state agencies, too.  Education Commissioner Jim Rier recently wrote that Medicaid spending growth has inhibited the state’s ability to meet its obligation to fund 55 percent of education costs.  The heads of Maine’s environmental agencies recently came out against expansion because of its continued threat to their mission to protect Maine’s environment and natural resource-based economy.  We’ve even seen politicians raid oil spill cleanup funds just to plug the Medicaid-induced leak in our budget.

In sum, Medicaid expansion means less care for the severely disabled, less money for education, and a weakened environment.

A recent proposal to combine Medicaid expansion with a managed care initiative has failed to increase lawmakers’ support for expansion so far.

There are several reasons for that.  First, managed care and Medicaid expansion are two separate issues.  Any benefit to the state that could come from implementing managed care is far outweighed by the cost that would accompany Medicaid expansion.

Second, the LePage Administration and DHHS Commissioner Mary Mayhew have already implemented “Accountable Care Organizations” that have managed costs, keeping Medicaid cost growth to one percent over the past few years, instead of the four percent national average.

Third, Medicaid expansion, if enacted, would be permanent.  Managed care, on the other hand, would have to be rolled out over time.  This sounds an awful lot like the “increase taxes now, cut spending later” promises that pervade Washington, D.C.

Fortunately, there is a better way.

A constituent recently emailed one of my colleagues on the HHS Committee and expressed frustration that the state is considering committing itself to a massive new welfare spending obligation.  The woman would be eligible for expanded Medicaid but was able to pick up a federally-subsidized private plan on the exchange for just $5 per month.

“We don’t need to expand Maine’s Medicaid system when low income people can get covered for less than five dollars a month,” wrote the constituent.

What’s more, numerous studies have shown that private plans are better than Medicaid anyway.  The higher provider reimbursement rate means better quality of care and access to it.

Forty thousand, or over half, of the 70,000 people that would be eligible for expanded Medicaid are eligible for these plans on the exchange.  I don’t support the ObamaCare law in its totality, but I support plunging Maine down its fiscal rabbit hole even less.

Declining Medicaid expansion and choosing to allow people to find subsidized coverage on the exchange is a great alternative that keeps the burden on the feds and prevents Maine’s economic competitive advantage from being harmed even more than it has over the past several years and decades of repeated welfare expansion.

And the private insurance market in Maine is healthier than ever.  Republicans and Gov. Paul LePage in 2011 passed a landmark state health insurance reform bill that has driven down individual premiums by as much as 70 percent and lowered rates for small businesses.

I encourage all concerned Maine citizens to look past the hype and rhetoric and examine the facts, history, and alternatives to Medicaid expansion.  Only then can we avoid repeating the mistakes of the past.

Rep. Deborah Sanderson (R-Chelsea) is the ranking House Republican on the Maine Legislature’s Health & Human Services Committee.