Partisan Politics Stall Hospital Debt Repayment

AUGUSTA – Republican and Democratic leaders held dueling press conferences on Tuesday over Gov. Paul R. LePage’s proposal to pay nearly $500 million owed to Maine’s hospitals and a separate Democratic proposal to expand Maine’s Medicaid program.

“Paying Maine’s hospitals is incredibly important for our economy,” said Senate Minority Leader Mike D. Thibodeau (R-Winterport).

“It seems just recently Maine Democrats put a new wrinkle in this agreement trying to attach the whole Medicaid expansion debate with paying Maine hospitals,” he said. “It’s unfortunate.”

“I would call on the Democrats to do what they know is the right thing to do and not try to change the rules midway through the game,” said Thibodeau.

The governor’s plan would use bonds taken against the proceeds of a renegotiated state liquor contract to pay $186 million for past Medicaid services, thus triggering $289 million in matching federal funds.

[RELATED: Baldacci says paying hospitals with liquor contract his idea…]

When the governor introduced his plan in January, Democrats accused him of playing “Washington-style” politics by linking unrelated issues.

Thibodeau said, “I’m not sure you could refer to the Democrats latest move as anything other than Washington-style politics.”

“The Democrats need to stop moving the goal posts,” he said.

According to Republicans, Democratic leadership announced their intention to tie the hospital repayment plan to expanding Maine’s Medicaid program at an April 24 meeting with legislative leaders and the governor.

Since that meeting, Democratic leaders have publicly walked back their demand that the two bills be linked, but they have yet to say definitively whether they will allow a vote on the governor’s plan as is.

House Minority Leader Kenneth W. Fredette (R-Newport) said he thought there was bipartisan consensus that paying the hospitals with the governor’s plan was the best route forward.

“To be surprised on Thursday with a demand form Democratic leadership that this be coupled with Medicaid expansion is very unreasonable,” said Fredette. “There is no nexus between paying the hospitals and Medicaid expansion.”

He said LePage is attempting to negotiate the best possible deal for Maine before committing to expanding Medicaid.

“I don’t believe it is appropriate for the legislature to try to go in now and undercut the work he’s trying to do,” said Fredette.

[RELATED: Maine GOP points up dangers, unforeseen consequences of Medicaid expansion…]

Assistant Senate Minority Leader Roger J. Katz (R-Augusta) said Democrats were focusing on the short term benefits of Medicaid expansion, whereas legislative Republicans and the governor were interested in the long-term economic implications.

“If we were to pass Medicaid expansion today, Governor LePage has zero negotiating leverage with the federal government,” said Katz. “Let’s give him the opportunity to negotiate the best deal we can for Maine. Maybe he’ll fail, but he may succeed in saving us tens of millions of dollars.”

Katz said coupling the two bills together makes little sense and could impose dangerous spending commitments on Maine taxpayers in the future.

“Not only do they not have anything to do with each other, it could end up costing us in the long run,” he said.

According to Republicans, paying Maine’s hospital debt will yield enormous economic benefits. In addition to injecting $500 million into the healthcare economy, paying the hospitals would also allow LePage to issue $200 million in general obligation bonds without putting Maine’s credit rating at risk.

“Democrats are holding that up – $700 million into the economy today,” said Fredette. “Democrats are stopping us from being able to put $700 million into the economy.”

[RELATED: Alfond:  “We might have to stop paying the hospitals…]

Immediately following the Republican press conference, Democratic leaders, including Senate President Justin L. Alfond (D-Cumberland) and House Speaker Mark W. Eves (D-North Berwick) held a press briefing of their own to discuss hospital repayment, Medicaid expansion and the implications of an April 30 letter from Health Secretary Kathleen Sebelius.

According to Democrats, Sebelius’s letter signals that the federal government has compromised with LePage and will not penalize Maine with reduced funding levels for having already expanded Medicaid in 2002.

“Today is a good day, I think, for the state of Maine,” said Speaker Eves. “What we know is that from the letter, communications from CMS, is that they will be covering 100 percent of newly eligible individuals that are going to be coming on to health coverage,” he said.

Sources in the Governor’s Office, however, said it is not at all clear that the letter means what Democrats have asserted it means.

Department of Health and Human Services Commissioner Mary Mayhew and two other DHHS staffers are currently in Washington, D.C. attempting to decipher exactly what the federal government’s position is with regard to funding for individuals covered under Maine’s earlier Medicaid expansion.

While Republicans believe there is no reason to connect hospital repayment with Medicaid expansion, Democrats insist the two issues are related.

“To not do these together would leave the job half done,” said Eves. “Good governance is about compromise. And these things have everything to do with one another.”

Said Eves, “We know that as we pay our final payment debt obligation to the hospitals it’s been our position to make sure that we do something that really addresses the cost drivers in our health care system, so that we’re not back here in this same spot. And we have an opportunity to accept these federal dollars to really address the cost drivers in our health care system and that is the charity care that the hospitals provide.”

President Alfond denied the Republicans’ contention that Democrats have moved the goal posts on hospital repayment. He said the meeting on Thursday was productive, but that Republicans afterward decided to intentionally deceive journalists and the people of Maine.

“What they took from that [meeting], is they started spinning this as reneging and offering threats and linking – I mean, come on, folks,” said Alfond.

“This is just Republicans distracting all of you and the state of Maine from understanding why Republicans will not vote for expansion,” he said. “Why will they not vote for expansion? Why is this not a good deal for the state of Maine?”

Said Alfond, “I am completely just surprised that they’re going against the will of the people – it’s an economic decision, it’s a moral decision, and what they’re trying to do is spin this as, you know, this is one combined bill, are these multiple bills.”

“What Mainers need to be asking Republicans right now is why they do not believe expanding health care in the state of Maine is not a good decision for individuals,” said Alfond.

Alfond refused to say whether Democrats will allow LePage’s hospital repayment plan to be voted on without being tied to Medicaid expansion.

“We’re looking at all of our options right now,” he said.

S.E. Robinson
Maine Wire Reporter
srobinson@mainepolicy.org