AUGUSTA — Today the Department of Health and Human Services released the fiscal note attached to Senator Tom Saviello’s bill to expand Medicaid. It will cost Maine taxpayers more than $500 million over the next five years.
“Medicaid expansion is not free, and the current proposal by Senator Saviello would cripple the financial stability this Administration has worked tirelessly to establish and erode the progress made to prioritize the needs of our elderly and disabled. Expansion has already driven large budget shortfalls in many other states, and Maine knows full well the reality of Medicaid expansion having made these mistakes under previous Administrations that led to large annual budget shortfalls, hundreds of millions in unpaid bills to hospitals and rate cuts to providers. We do not need to repeat the mistakes of the past.” said DHHS Commissioner Mary Mayhew.
DHHS has estimated that traditional Medicaid expansion—as outlined by the Affordable Care Act—would cost Maine taxpayers more than $315 million over the next five years. Senator Saviello’s bill, however, employs a version of expansion known as the “private option.” The latter uses the same taxpayer dollars that would fund traditional Medicaid expansion to purchase commercial plans on the federal exchange for Medicaid members with income levels of 100 percent to 138 percent of the Federal Poverty Level.
Due to the fact that commercial health insurance plans are more expensive than typical Medicaid coverage, the private option would come at a significantly higher cost to Maine taxpayers—$520 million over five years rather than $315 million for traditional expansion.
Maine’s analysis is consistent with that of other states. Last year, when Nebraska considered a similar private option Medicaid expansion vehicle, that state commissioned a report by Milliman to project expansion costs. The report showed that purchasing Qualified Health Plans for Medicaid members would cost 93 percent more than traditional Medicaid. Similarly, a Milliman report demonstrated that private option expansion in Indiana would cause state general fund expenditures to increase by $500 million from Fiscal Year 2014 to Fiscal Year 2017.
“Senator Tom Saviello claims that passing his bill is ‘just the right thing to do.’ He couldn’t be more wrong. First, expanding MaineCare—and certainly doing so with a costlier version of the plan—would immediately blow a massive hole in the state budget, put an end to any other discussions regarding other state funding priorities and efforts to reduce the tax burden on Mainers, will most certainly lead to future crisis-riddled state budgets that can’t plan beyond the current fiscal year and will halt all of the progress we have made when it comes to properly funding our nursing homes, paying hospitals on time and providing for those with intellectual and developmental disabilities,” said Commissioner Mayhew.
The LePage Administration and the Department of Health and Human Services will once again stand for Maine’s taxpayers, the elderly and disabled by opposing yet another proposal for a massive expansion of welfare in Maine’s Medicaid program.