Governor Paul R. LePage
|December 2, 2011||
Radio Address: The Structural Problem with Medicaid
December 2, 2011
The essence of management is making decisions.
Managers are constantly required to evaluate alternatives and make decisions regarding a wide range of matters. Just as there are different managerial styles, there are different decision-making styles.
Hi. This is Governor Paul LePage.
My decision-making is unlike my predecessors because of my business background.
For more than 30 years I brought businesses back from bankruptcy to solvency and I bring that experience to the people of Maine.
The State runs much like a business – or at least it should.
If we were a private-sector company we would be filing for bankruptcy.
Every two years, the State has a fixed amount of budgeted resources which exceeds $6 billion.
In state fiscal year 2012, $2.4 billion will be used for Medicaid.
Of that, $662 million dollars is the state’s share and right now, Medicaid is running $120 million over budget.
For nearly a decade, the government-run program expanded out of control. Costs became unsustainable and it was the decision of the previous administration under Democratic leadership to continue paying for the program by robbing Peter to pay Paul. These gimmicks are only short-term fixes.
One-time, so-called, stimulus funds from the federal government have made it appear that the budget was balanced during the past three years.
Additionally, Maine’s hospitals were not being paid; Reimbursements to providers were cut. This has forced providers to drop Medicaid patients because Maine rationed healthcare funds.
All of these decisions allowed the department to sustain Medicaid expenditures, regardless of structural problems. The State Medicaid program is one of the most generous in the country.
We spend more on Medicaid per person than the national average. We have continually increased Medicaid eligibility at a higher rate than the national average.
Total spending state and federal on Medicaid has increased by over $1 billion in 10 years; a 45 percent increase, but it’s still not enough.
Maine’s population on Medicaid is 35% above the national average.
We must move in the opposite direction if we are going to prevent the system from becoming bankrupt.
In 2008, there were 303-thousand Medicaid recipients.
Today, we have 361-thousand Mainers receiving Medicaid.
In fiscal year 2012, Federal Medicaid reimbursement to Maine has been reduced by more than $210 million. These combined factors are causing our State to go bankrupt.
It is the State’s responsibility to provide a quality safety net to Maine people – especially our elderly, disabled and children – who need it most.
In 2002, Maine expanded the Medicaid program. In fact, policymakers had to get permission from the federal government to cover so-called non-categoricals.
It’s a decision that has proved to be extremely expensive.
People who fall into this category have no children in the home, are not pregnant and are not disabled. Maine is one of only 15 states that offer this benefit.
Basically, this is free healthcare for 19-thousand Mainers and in a two year period, they have cost taxpayers $39 and a half million in state dollars.
The fact is – we can no longer afford it.
We must be prudent and pay our bills and it’s clear, cuts will be difficult. No administration wants to take away anything from anyone, but at the same time, as policymakers, we have to be held accountable for our spending and refrain from gimmicks to get us by.
Unless these structural problems are addressed we will continue to discover gaping holes in the budget.
Commissioner Mayhew is doing an incredible job leading nearly 3,600 employees and running the largest state agency. She and her staff are addressing the structural issues within the department and examining the services the State is required to provide.
Our safety net will continue to stay in place. However, it will be one that is within our financial means and offer quality care.
No question, tough decisions will have to be made. But then again, that’s why I signed up for the job.
Thanks for listening and I hope you enjoy the weekend.