Medicaid Expansion

Medicaid expansion will cost our state dearly

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Liberals in Augusta are likely elated with the latest communication from Maine’s Department of Health and Human Services. The department’s recent release featured an update on the status of Medicaid expansion efforts in the state. As of mid-February, 6,237 individuals had been enrolled in Medicaid under the expansion package.

On Jan. 3, Governor Janet Mills signed her first executive order to expand Medicaid coverage to an estimated 70,000 Mainers. This act fulfilled her promise she made over and over again on the campaign trail.

Governor Mills’ budget overview proposes approximately $150 million in spending on expansion over the next biennium. In addition, she is allocating $29 million to the new Medicaid Reserve Account from the Fund for a Healthy Maine.

There’s a lot Maine could learn from other states that have expanded Medicaid to able-bodied, childless adults. The two major lessons are more individuals enroll than what is originally projected, and over time, the per-enrollee costs increase substantially.

When Ohio expanded Medicaid, the cost was $1.5 billion more than initially budgeted in the first 18 months. After two years, it ballooned to $2.7 billion over budget, which was primarily due to underestimates in enrollment. Initial projections estimated 365,000 Ohioans would sign up in the first year and only 447,000 by 2020. As of June 2018, the number of enrollees totaled 639,000.

This horror story is one that Maine lawmakers should learn from before it is too late. If Medicaid expansion costs more than projected and leaves state legislators scrambling to cover the costs of the program, the first thing that will be on the chopping block is services for the truly needy. The federal government reimburses the state 90 cents for every dollar spent for able-bodied, childless adults but only covers 64 percent for Maine’s most vulnerable citizens. Therefore, cost overruns due to expansion essentially provide incentive for states to cut services for the truly needy before able-bodied adults in order to maximize federal funds while still reducing state spending.

If individuals continue to enroll by the thousands, we could easily run over the projected 70,000 Mainers that are expected to enroll in the program.

To boot, the governor has said she will not honor the approved 1115 waiver approved by the Trump administration that would have allowed Maine to require some Medicaid recipients to work or volunteer to receive benefits. The terms of the waiver would have required able-bodied Medicaid recipients to work, volunteer, or go to school for a minimum of 80 hours per month. This sensible policy would help individuals utilizing Medicaid expansion funds to remain in the workforce and realize their full potential.

Not only is it clear that Governor Mills is unwilling to use fiscal restraint as it relates to Medicaid expansion, it appears she is determined to keep Mainers dependent on government benefits.

Government is supposed to be there to give individuals a hand up, not a hand out. Hopefully Governor Mills will realize this before it is too late.

About Adam Crepeau

Adam Crepeau serves as a policy analyst at The Maine Heritage Policy Center. He can be reached at acrepeau@mainepolicy.org.

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