The Great Medicaid Debate: The Real Facts

In these difficult economic times, Maine has been recognized by economists for exceeding the national average when it comes people having health insurance.

The Maine Economic Growth Council recently cited Maine for the health coverage it provides its citizens (90 percent in 2006).
The percentage of people receiving Medicaid in Maine is directly linked to Maine’s lower than average rate of people who are uninsured.

The Picture of Social Services Funding in Maine- the larger context

In Maine, social services are funded in three ways – by General Fund only (Grants), Federal Block Grants and Medicaid.

Over the years, there has been a decrease in Block Grant Funding and General Funds, more than $25 million when you compare State Fiscal Year 02 to State Fiscal Year 09.

The Impact of Suggested Medicaid Cuts

Some have suggested a $300 Million cut in Maine’s Medicaid program, bringing Maine to the so-called ‘national average.’

If we did so, Maine would not be able to meet its obligation to provide mandatory services as defined by the Federal Government to people who are currently eligible.

SFY08

Maine’s General Fund budget for Services	$630 million
The Cost of Providing Mandatory Services	$290 million
The Cost of Pharmacy Services	$54 million
Added cost from Services that would shift to Medicaid’s mandatory coverage group	$108 million
Remaining Funds for ‘optional services’	$178 million

Services Categorized as Optional Include Services Perceived by Many as Basic:

These include:

Eye Care
Dental Care
Preventive Care – Physical, Occupational and Speech therapies
Primary care management
Critical access hospitals

Cutting Eligibility Levels

Another suggestion is to reduce eligibility by four percent, from 23 percent of Maine’s population to 19 percent, or the national average for Medicaid programs.

Using 2006 census data and the current enrollees in the Medicaid program, as of January 2008, Maine was only 1.7 percent higher than the national average in terms of eligibility. (20.7 percent vs. 19 percent).

Trimming eligibility to the national average would mean that 22,727 people who currently are eligible for Medicaid would no longer receive services.

There is already an initiative in the supplemental budget to reduce the number of recipients by 6,800 which will reduce Mainers receiving Medicaid to 20.2 percent.

Even with this reduction, nearly 16,000 other members would have to be eliminated to reach the national average.

Comparing Medicaid Income Limits

A recent Medicaid Watch report showcases a chart that is misleading when it comes to Medicaid income eligibility limits.

It states that the U.S. Average income limit for non-working parents is 41 percent of the Federal Poverty Level and that for working parents, the U.S. Average is 63 percent of the FPL.

What’s misleading about this chart is that the U.S. average income eligibility level is just that – an average.

Maine is not an outlier when it comes to exceeding the United States income limit average:

32 states (63 percent) are over the national income limit average for non-working parents.
29 states (57 percent) are over the national income limit average for working parents.

(Source: Kaiser Family Foundation).

The Real Fact is that people in Maine who receive Medicaid do not earn so much more than others across the nation.

	U.S. Average	Maine Current	Average Income of Maine Recipient
	Income Eligibility Limits
Single parent, 3 children	$13,356	$43,672	$11,655
Married couple, two children	$13,356	$43,672	$17,932

In analyzing our data, we can unequivocally state that there are very few people at the higher end of the eligibility limit in Maine. For example, in looking at a family of four, only 24 families statewide are within 10 percent of the income eligibility limit. This represents 2/10ths of 1 percent of the four-person families who are covered by MaineCare.

Another argument is that Maine should simply drop anyone who is not eligible for Medicaid under its categories.

Dropping this population, known as the ‘childless adults,’ would impact Maine’s poorest citizens and produce a cost-shift to the system.

The average annual income of a ‘childless adult’ Medicaid recipient is $5,304 annually.