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House Republican Leader Ken Fredette of Newport
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For Immediate Release

Date: 06/18/13

Republicans Ready to Stop Another Expensive Welfare Expansion

Veto question on House calendar, ready to be taken up

AUGUSTA - After Governor LePage last night vetoed LD 1066, the bill to expand Maine's Medicaid program by at least $150 million per biennium, the bill was sent back to the House. The Speaker may call for an override vote at any time. House Republicans stand ready to sustain the Governor's veto and prevent another irreversible fiscal mistake for the State of Maine.

"We've been down this road before," said House Republican Leader Ken Fredette of Newport. "As in the past, Republicans approached this issue with an open mind, but the numbers make clear that the proposal before us is a bad deal for Maine."

For example, despite claims of 100 percent federal funding for the first three years, the state will actually have to spend $10 million on additional administrative costs over those three years at the Department of Health & Human Services (DHHS), including the hiring of 93 new bureaucrats. Maine will also be forced to re-expand coverage to about 15,500 able-bodied people scheduled to be dropped on January 1, 2014, but at a much lower 62 percent federal matching rate, costing the state about $18 million per year that would not be spent without expansion. Over the long term, when federal matching reaches 90 percent, the cost to the state will be $75 million per year.

Past Medicaid expansions promised to be affordable, reduce charity care and emergency room usage, and improve the health of Mainers. However, since the largest expansion ten years ago, Medicaid has left initial budget estimates in the dust. Over twice as many eligible recipients as expected enrolled before enrollment had to be capped. Medicaid has doubled as a share of the state budget in the past 15 years, crowding out precious funds for other basic functions of state government.

"We saw the crowding out effect yesterday as Democrats pushed a snowmobile registration fee increase because our welfare programs continue to take money from other areas of the state budget," added Fredette.

In addition, charity care—uncompensated care provided by hospitals to the uninsured—has increased from $67 million to $196 million in just the past decade and studies by Harvard University, the Massachusetts Institute of Technology, and the Muskie School at USM have found that Medicaid recipients use emergency rooms as much, or even more, than the uninsured. A recent study published in the New England Journal of Medicine found a complete lack of physical health benefits to Medicaid enrollment.

"And we have had to pay dearly for this lack of results," said Assistant House Republican Leader Alexander Willette of Mapleton. "We just passed the bill to finally pay off our massive debt to Maine hospitals, which we accumulated as a direct result of Medicaid expansion. How could we continue to practice the same fiscal irresponsibility that created that debt?"

Fredette agreed, adding that the DHHS has estimated a net cost to Maine that stands in stark contrast to a study cited by the Democrats.

"It's DHHS that will be coming to us after we've implemented expansion, and it's DHHS's estimates that will be the basis for our budgets, and it's DHHS that is telling us the expansion proposal will cost Maine taxpayers about $150 million per biennium over the long term," said Fredette. "That's about $150 out of the pocket of every adult Mainer, and they just don't have it."

Fredette has offered a bill to establish a commission of experts detached from the legislative process to study other options for Medicaid expansion, such as the Arkansas model, which utilizes private insurance exchanges. Democrats on the Health and Human Services Committee, where it now sits, have refused to schedule a work session for the bill.

In addition, Republicans have offered affordable alternatives that promote functional health insurance markets and take advantage of federal funds without putting state taxpayers - who already support the nation's third largest Medicaid program with the nation's seventh highest tax burden - on the hook.

The health insurance exchanges established under Obamacare will provide private policies to those earning 100-400 percent of the federal poverty level for as little as $5 per week. Republican reforms to the state's health insurance laws have resulted in new individual insurance products that are up to 70 percent less expensive than older options. For example, an Anthem individual health insurance policy with a $2,250 deductible and mental health benefits used to cost a 40-44 year-old Mainer $758.41 per month. That same policy now costs that same Mainer just $314.20 per month, a 59 percent decrease.

"We're on the right track," said Willette. "These are real solutions to Maine's health care needs that don't put Maine taxpayers on the hook but do provide affordable options. At some point we have to be thinking about the younger generation that will have to inherit the fiscal mess the Democrats are proposing."

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Contact:
David Sorensen
Maine House Republicans
Tel: (207) 205-7793