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Rep. Beth O'Connor (R-Berwick)
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For Immediate Release

Date: 10/11/12

Rep. O'Connor Op-Ed: Maine's Medicaid cuts may be decided in court

To Foster's Daily Democrat

By Rep. Beth O'Connor

Recently, six Maine city mayors urged the federal government to block MaineCare cuts passed by the Legislature in May. Listening to them, you might think that the governor and the Legislature set out to cut welfare on a whim. That's not true, but there is much more to this story.

Maine is not needlessly seeking a waiver from the federal requirement to maintain current MaineCare levels. Any cuts to MaineCare - Maine's name for Medicaid - were specifically crafted to protect the program for the people who need it most while also recognizing the $80 million budget shortfall largely due to MaineCare cost overruns.

The federal government, however, apparently wants to lock Maine into its previously unsustainably high levels of MaineCare spending. This federal directive ignores the fact that Maine provides Medicaid services that far surpass the federally mandated standards as well as the standards of most other states.

We need the waivers to maintain a balanced budget, and the state now plans to press the issue in court. Maine Attorney General William Schneider has petitioned the U.S. 1st District Court of Appeals to force the federal government to approve changes to the MaineCare program, which is funded jointly by the state and the feds.

For many years, Maine has had the most lenient eligibility requirements for Medicaid. Consequently, enrollment surged over the last decade, jumping from 202,000 in 2002 to about 300,000 in January 2012 - a nearly 50 percent increase while Maine's population was growing only 7 percent. The current enrollment expands to approximately 341,000 if we include 41,000 Medicare recipients who have been added to MaineCare to help cover their Medicare deductibles and co-pays.

No matter how you slice it, MaineCare embraces at least 25 percent of the state's population. For context, consider that California has only 13 percent of its population on Medicaid, and New Hampshire and Massachusetts are both at 16 percent. If our enrollment rates are significantly higher than the mainstream, so are our costs. In 2009, the Department of Health and Human Services (DHHS) reported that Maine's per person Medicaid cost was $1,895, while the national average was $1,187.

All this spending adds up to $2.5 billion for medical welfare every year, more than the state spends on K-12 education. Meanwhile, heavy hospital usage by MaineCare recipients keeps the state behind the fiscal 8-ball, unable to keep pace with mushrooming costs. Right now, hospitals are owed some $450 million for Medicaid patients, even after the LePage administration paid off a huge portion of the hospital debt it inherited.

The situation clearly was not sustainable. The Legislature set a goal of protecting Medicaid for those most in need of help while looking for savings by restricting eligibility for marginal groups.

One sensible step, for example, was removing all immigrants who do not qualify for federal aid because they have not resided in the United States for five years. This alone will save nearly $10 million a year. Some groups of legal noncitizens, such as refugees, will remain on the MaineCare rolls.

We also cut back on people on Medicaid who also were eligible for Medicare to eliminate redundant spending on those covered by both programs. The Legislature also chose to cut MaineCare for people age 19 and 20, joining the 45 other states that recognize childless adults at that age often have other coverage options.

These carefully targeted changes eliminated the need for across-the-board cuts that would have hurt those who truly need Medicaid. The enrollment cutbacks are not extreme. Even after they occur, we will still have a much larger percentage of our population on Medicaid than the national average.

There is a limit to what the state can afford, but Washington apparently does not care about Maine's economic stability. Under the Obamacare rules, we are "frozen in place" with regard to Medicaid enrollment. The so-called "maintenance of effort" requirement means that we must maintain the same Medicaid program we had in 2010, when Obamacare became law. Ironically, states that had tight eligibility standards for Medicaid are also frozen in place, but at a far lower cost. Maine is effectively being punished for having run a very generous program.

If Maine is unable to attain a waiver for the MaineCare cost reductions, we will be in a fiscal bind that will force the Legislature to readjust priorities. Critics of the MaineCare reforms like to pretend that Maine does not face budget constraints. But that's not true, and many other states are now confronting the same tough economic reality. The Kaiser Family Foundation, a prominent non-partisan policy organization, reports that 47 states in 2011 were forced to take cost-containment actions for Medicaid. In 2012, 49 states took further action, including reductions in provider payments and benefits, pharmacy controls and increased co-pay requirements. Obviously, the cost of Medicaid is a mounting concern across the country.

Maine's reform efforts, unlike those of other states, may be denied because Maine had more to cut, requiring tougher choices than all but three other states. If we are denied the ability to reduce Medicaid funding, MaineCare will become an ever-expanding portion of the state budget, squeezing out other beneficial programs and services. ###

State Rep. Beth O'Connor (R-Berwick) serves on the Health and Human Services Committee.

Contact:
Jay Finegan
Maine House Republicans
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