Friday, October 11, 2013

More Medicaid debt no solution to health insurance problems - By Senator Gary Plummer

During every legislative session there are many difficult decisions that every state senator and representative must make. Before I cast my vote, I try to gather all available facts and carefully weigh them before deciding how I should vote. I also review all of the correspondence that I have had from constituents on that particular issue. 
One of those decisions I faced during the last session was whether to expand Medicaid in Maine, also known as MaineCare. My research became particularly difficult even though there was extensive information available. It was not easy to separate fact from fiction.

The Legislature had two major votes on Medicaid expansion. The first time, it was coupled inappropriately with a bill to pay off Maine’s hospital debt. The Governor vetoed that bill (but later signed a separate bill to pay off the hospitals). The Medicaid expansion legislation was then reintroduced to the Legislature as a standalone bill. It passed the Legislature, was vetoed by the Governor, and the Legislature upheld that veto.

Throughout the process, Mainers were inundated with messaging from both sides of the issue. The disagreement centered on how much the expansion would cost Maine, could we afford it, and whether it was in our best long-term interests.

A few weeks ago, I was asked to attend a meeting with a group of people who favor the expansion of Medicaid.  The meeting day came and I sat around the table with three ministers, a representative from AARP, a representative from Maine People’s Alliance, and a group of other interested constituents.  I listened as each person expressed his or her concerns. I expressed my uneasiness with the potential for the huge costs of this “free” health care. 

Those concerns are detailed below. At the end of the meeting we shook hands. Although we still had differences, I believe we all had a greater understanding of the complex issues involved in Medicaid expansion.
The proponents of Medicaid expansion told us repeatedly that this deal would be too good for Maine to pass up because the federal government would be picking up the entire tab to cover Medicaid for an additional 70,000 Maine residents. 

But it turns out that money isn’t so “free” after all. 

Under the proposal, the first three years of the expansion would be on the federal government’s dime; however during that time Maine would have to come up with $10 million to cover administrative costs during each of those years. Where would that money come from? After that, the federal reimbursement rate would drop to 90 percent. Maine’s Department of Health and Human Services predicts that under the best case scenario, after those first three years, Maine would have to come up with an additional $75 million annually to pay for the expansion. In every two-year budget cycle, that would be $150 million less we would have for essential government services such as education and public safety. 

It’s also important to note that when it comes to Medicaid, Maine has already been much more generous than most states, spending more than 30 percent above the national average for state-funded health care. Those states that are accepting federal dollars to expand Medicaid as part of the Affordable Care Act (ObamaCare) will be catching up to Maine when it comes to paying for these subsidized services.

Earlier I mentioned how the State of Maine recently paid off its debt of nearly half a billion dollars to hospitals around the state. That debt came as a result of Medicaid services these hospitals performed without being reimbursed by the State in previous years. It also coincided with Maine’s decision to rapidly expand Medicaid beyond our ability to pay the bills.

We were able to retire this debt thanks to revenue that will come from a renegotiated state liquor contract. But with the ink hardly dry on the checks to Maine’s hospitals, we are once again talking about recreating the very problem that got us into debt: expanding MaineCare beyond our ability to pay for it. Democratic leadership in the Maine Legislature has indicated it wants to reintroduce the legislation in the next session that begins in January.

For the reasons mentioned above, I could not vote in favor of the expansion. I will certainly consider any new bill in the same way that I have before. However, there will need to be many more answers to the funding sources before I could vote to support Medicaid expansion. 

Meanwhile, the market-based reforms for health insurance passed by the previous Legislature have led to two positive developments in Maine: more Mainers, particularly young adults, are signing up for health insurance and most of those who are already enrolled are seeing lower premiums or at least drastic reductions in their yearly increases.

These are the types of reforms we should be embracing instead of contemplating more debt we can’t afford to pay back.

Senator Gary Plummer represents Maine Senate District 12 which includes the Cumberland County towns of Casco, Frye Island, Raymond, Standish, and Windham as well as the York County town of Hollis.


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