Medicaid expansion anything but 'free money' from the Feds

A Sept. 6 editorial in this newspaper suggested that Maine will soon be missing out on “big checks” from the federal government to pay for health insurance in Maine.

The piece took Gov. Paul LePage and many Republicans in the Legislature to task for not agreeing to expand MaineCare (Maine’s version of Medicaid) to an additional 70,000 Mainers by taking federal dollars to pay for the expansion. For now, we’ll put aside the fact that in addition to paying state taxes, we also pay federal taxes which would be the source of this “free money.”

The editorial ends by stating that had Maine agreed to the expansion, we would be receiving $256 million in federal dollars annually, which is more than the sum the state paid recently to reimburse Maine’s hospitals for years of accumulated debt.

It’s an ironic point considering runaway expansion of Medicaid is the reason why Maine racked up so much debt with the hospitals in the first place. Now we’re contemplating a similar expansion on steroids.

In the first decade of this century, Maine expanded taxpayer-funded health care (Medicaid) to an unsustainable rate. It grew 78 percent between 2002 and 2009, while the population only increased by 7 percent. Maine’s spending on its Medicaid program is more than 30 percent higher than the national average.

We would be remiss if we did not mention that the last expansion currently costs Maine $175 million a year in general fund dollars. In addition, the federal reimbursement for MaineCare for a $2.5 billion budget was at a rate just under 75 percent in 2010. As of October 2013, that rate declines to 61.55 percent. That means that Maine taxpayers must fund an additional $320 million annually for the same level of programming.

In short, we have already expanded Medicaid while other states haven’t, and have paid dearly for it as evidenced by years of never-ending supplemental budgets needed to cover budget shortfalls created by cost overruns in Medicaid spending that continue to grow and cannibalize our state budget.

While it is true that many states have recently signed up to take federal dollars for Medicaid expansion under the Affordable Care Act (ObamaCare), they will still be lagging behind Maine’s previous expansions resulting in our current and expensive level of government-paid health care.

The Medicaid expansion proposal has been sold to us with the promise of Maine receiving 100 percent funding for it from the federal government. But a closer examination reveals this is not a good deal for Maine. While the first three years of the expansion would be “free,” the federal reimbursement rate would drop to 90 percent after that.

The Department of Health and Human Services estimates Maine would then have to start contributing 75 million additional dollars to Medicaid every year. That means we would have to ask Maine taxpayers to contribute an additional $150 million in every two-year budget going forward. That’s $150 million less we would have for education, public safety and other vital state programs.

And it turns out, the short-term costs during that “free money” period aren’t so free, after all. Maine would have to kick in $10.5 million annually during those first three years for administrative costs of covering the additional 70,000 Mainers.

In addition to creating endless debt, Medicaid expansion in Maine has had another unintended consequence over the past 10 years: it has provided an incentive for those able-bodied individuals who were paying for their own health insurance to join the welfare rolls at our expense. After all, why pay for something when you can get it for (here comes that word again) free?

So, contrary to what this newspaper editorial states, Maine does not stand to benefit from the “big checks” coming from the federal government. Those big checks come with a price that we simply cannot afford.

Sen. Jim Hamper and Reps. Richard Malaby, Deb Sanderson and Heather Sirocki serve on the Health and Human Services Committee.

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Comments

JOANNE MOORE's picture

One payer health care system

When medicine is a for profit enterprise, it is always profit before patients. Always.
I am not surprised that the pathologic right always insists that this country does not have the money to treat everyone who is sick or disabled. That is a smokescreen for their greed.
Businesses already have many of the regulations removed that the right say impeads on their profits. What does the right want? More Triangle Shirtwaist factory tragedies? Or more Bangladesh factory horror stories? The simple answer would be, Yes it does. If human life stands in the way of profit, then humanity must be brought to its knees, accept a substandard wage, thank God we don't live in a poor country, and scrape by with no safety nets to ease the suffering of so many.
What the Ayn Randians don't tell you is they would like all humanity to be paid the same wage worldwide, live and work under the same, no regulated squallor, and if you get sick or injured, tough it out or (preferably) die.
They never mention the fact that the cost of Iraq, Afghanistan, and other assorted illegal wars is what is draining our country. Why? Because the chosen few are making blood money hand over fist by either building the war toys (many un-needed) or getting no bid contracts for outrageous costs that the enlisted men and women used to do.
We live in a country of united states. That means that we all put into the kitty and when one state needs help the money comes from everyone. Even Ayn Rand was helped by the government when she used Medicare.
If there be ruthless people who want us to suffer then they should be shamed, not glamorized for their "business is business" idiology. This goes for elected officials, public personalities and even commentators on this site.

MARK GRAVEL's picture

"We live in a country of

"We live in a country of united states. That means that we all put into the kitty and when one state needs help the money comes from everyone."

To a limit. When the taxpayer's are footing ti bill for nearly 50% of the population, it is time to push back and say no more.

NO MORE.

FRANK EARLEY's picture

I would have thought............

I would have thought that their place on the Health and Human Services Committee would require a bit of knowledge of which they speak. At the very least a little common sense would go a long way. Making statements like reminding us that, it isn't free money, it is actually money we pay in Federal taxes. Correct me if I'm wrong, aren't other states going to be benefiting from our tax payments. Yes we pay Federal taxes, yet we won't see any return on those payments. Ya, that'll teach em.
I'm sorry, none of these people contributing to this letter, make any sense. I'm assuming they are trying to make the numbers show that the Governor was right in vetoing the expansion of Medicaid. Well in my opinion, none of the arguments made add up. The Governor has tossed out the baby with the bath water. Only time will tell just how big a mistake he made, but trust me a mistake was made. If you are a citizen of Maine, and you happen to be less fortunate than others, you will feel the sting more than some. A lot more than the ones who made the decisions that caused the sting in the first place. Remember that next time election day rolls around, I will.......

CLAIRE GAMACHE's picture

People

So much for "People before politics". I don't see how any of this is relevant to the woman in need of heart surgery who is too sick to work and can't get or can't afford health insurance who is being kicked off. If she was your mother or your wife would any of this make any sense ? Other than whining about the cost of treating the sick, I'm not hearing any solutions in this spiel. Unless the solution is to kill off this lady we are not saving the people of Maine one nickel in denying her access to medical care not to mention the callous lack of humanitarian considerations.

MARK GRAVEL's picture

Perhaps you missed part of

Perhaps you missed part of the message: THERE IS NO FREE LUNCH

After all, look how much humanitarianism there is in poverty areas of Africa. Denying the fact that it does take money to provide these services does not make it any less true. Denying this country is spending more money than is sustainable does not make it any less true. Be thankful for what we do have; be thankful you were not born in an impoverished country.

CLAIRE GAMACHE's picture

Sustainable

Telling us over and over that we cannot pay for medical insurance and that the government is broke and that we just have to learn to be happy going without is coming straight out of the Bible of Grover Norquist. Personally I don't subscribe to that religion. In fact I think he is full of it and I have seen no proof that he isn't just fudging numbers to promote his crazy Ayn Rand, Goldwater ideology. We can have whatever services we consider to be important and we do not have to accept that only the rich have access to our tax dollars. We had a middle class before and we can have one again once we kick the crazies out.

MARK GRAVEL's picture

Mere examination of the

Mere examination of the national debt reveals that we cannot have it all even in an atmosphere of denial.

The only way to get back the middle class is to encourage job creation in America, which means we may have to change our standard of living to compete with other countries.

Until American's reconcile with that concept, the middle class will continue to shrink.

Bruce Hixon's picture

Yeah, let's compete

Why don't we all move to Pakistan or Bangladesh where we can work for $.21 per hour in dangerous conditions, where if we die in a work fire our families MIGHT get a hundred dollars to bury us. Someone needs to learn their labor history. Some just won't be happy until events such as that Triangle Shirtwaist fire at the turn of the 20th century in New York become everyday events. That white slavery was common in America a hundred years before the first black slaves arrived in America. That as America busted unions to be able to compete industrially with third world nations, many European countries maintained their unions and took Americas market share. Sweatshops were common in America into the 20th century. It was the growth of Americas unions that virtually eliminated sweatshops from America. Going backwards would simply be ignorant. The increasing attacks on organized labor, however, show how pervasive that ignorance has become, and which side of the political spectrum supports it.

MARK GRAVEL's picture

Until any of this happens, we

Until any of this happens, we have room to shift are standard of living in that direction. Otherwise, it is mere speculation that may not ever happen.

CLAIRE GAMACHE's picture

Africa

Telling the lady who needs a heart operation and can't get health insurance that she is lucky she doesn't live in Africa is frankly pretty dumb. If she dies from lack of medical care she may as well be living in Africa. Providing her with health insurance so that she doesn't end up in charity care and can go back to work after she gets well is not creating poverty. If anything it is saving the people of Maine the cost of charity care, and disability money not to mention the lax of tax money she doesn't pay when she can't work. And no I don't think we are doing so great if our community is not the hellhole that is Somalia. We should be aiming higher than that.

MARK GRAVEL's picture

First, your story is

First, your story is hypothetical. Moreover, most heart disease surfaces in older people, so it is likely our hypothetical lady is in retirement; hence, your productivity argument does not apply.

The fact is that America cannot afford all that you want it to provide. America already spends $0.40 borrowed on every dollar. How can adding to this debt be anything but bad.

Given that you hypothetical lady can go to the emergency room is a stark difference over Somalia. Be thank full your lady has that option. Well, on a side note, perhaps your lady would not have heart disease if she as a more restrictive caloric in take like those in Somalia. That is a good dose of lemonade.

NOT ENOUGH MONEY TO DO EVERYTHING - SIMPLE.

 's picture

Almost everything you write...

...is hypothetical.

MARK GRAVEL's picture

Your comment is meaningless

Your comment is meaningless without examples.

My message is consistant - smaller government, less taxes, borrowing $0.40 of every dollar the US spends is an indication that she is broke.

 's picture

And hope you won't die ...

... in an impoverished country. O and his O-minions are working tirelessly to change the US into one.

MARK GRAVEL's picture

Oh, you mean trickle up

Oh, you mean trickle up poverty? Claire dislikes trickle down economics, but embraces trickle up poverty.

The key to better wages is competition among companies for labor. Until this government encourages job creation, little will change. Also note that the government cannot force job creation, the can only inhibit it with regulation and taxes.

Corporations have free will, so to get corporations to invest in America, America must remove more barriers than the competing country or state.

All the government force in the world will not change that aspect of business.

 's picture

dumb

Let me get this straight. Somebody tells you if you put in a dime they'll kick in 90 cents. And that's a bad thing? And it will lower your health insurance premiums and treat sick people? Is the gop saying it's worth giving up the 90 cents of every dollar to continue to kick people in need when they're down? What a twisted ideology.

MARK GRAVEL's picture

Let me set you straight.

Let me set you straight. Ninety percent from the Federal government comes from the same set of people paying the 10% kick-in.

The only reason one would not realize the money comes from the same people is that you are in the bottom 50% and pay virtually no Federal Income tax.

Take about greed an wanting something for nothing.

 's picture

straight? no.

So, those Mainers who pay into the 90% should not expect any return? The 90% should go to other states, those that actually care for their citizens' well being?
You know what they say about assumptions.
I pay income taxes and do not benefit financially from the expansion of Medicaid. I know it's beyond your comprehension to understand someone wanting better for the disadvantaged and downtrodden - I mean other than "look at me, I'm a bootstrapper!"

MARK GRAVEL's picture

"The 90% should go to other

"The 90% should go to other states, those that actually care for their citizens' well being?"

1. Fact: Maine receives $1.41 for every dollar sent to Washington DC. Maine already receives its fair share.
2. Fact: Guiding the country away form fiscal catastrophe is considering the well being of citizens. Your plan is not sustainable.

"...wanting better for the disadvantaged and downtrodden "

The why don't you stop asking the government for "free" money. Get off you ask and donate your time and money to help the downtrodden in Maine. That is more cost effective than having Washington DC do it for you. Moreover, how much of an achievement is it if you vote to have others pay for wasteful programs. Wasteful in the sense you have layers of government inefficiency rather than direct charitable involvement.

MARK GRAVEL's picture

Take about greed an[d]

Take about greed an[d] wanting something for nothing.

 's picture

That would describe...

...your rich, wanting to get richer on the backs of the poor, conservative counterparts.

MARK GRAVEL's picture

Let's analyize your

Let's analyize your comments:

1. You are rich - I wish, I aspire, but not so.
2. Want to get richer - who doesn't want more money?
3. I want to get richer on the backs of the poor - what is your evidence or example?

Bobby, little Bobby, you are just dishing up loads of bull droppings.

Bruce Hixon's picture

Example 1

You move to Florida so you don't have to pay the same taxes as those who read your drivel in a State you don't even support.

MARK GRAVEL's picture

I don't pay Maine taxes, so

I don't pay Maine taxes, so that requirement is satisfied.

 's picture

You wish.

You wish.

MARK GRAVEL's picture

Yet no examples; that bag

Yet no examples; that bag must be empty then.

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