DHHS budget proposal stalls in Maine Senate

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AUGUSTA — After floor speeches that went well into the night, the Maine Legislature on Thursday stopped short of ratifying a $157 million budget to meet the immediate shortfall at the Department of Health and Human Services.

The House of Representatives approved the budget, 109-27. However, the Senate’s 22-13 vote fell two votes short of reaching the two-thirds approval needed to enact the plan’s cuts in Medicaid spending. 

The outcome prompted Senate President Kevin Raye, R-Perry, to label Democrats as obstructionists. His prepared statement was released moments – not minutes – after the Senate vote.

“The irresponsible action of Senate Democrats playing Russian roulette with the DHHS budget puts at risk the well-being of Maine’s most vulnerable citizens and the health care providers who serve them,” Raye said.

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Twelve Senate Democrats voted against the budget, some saying it “fell short of Maine values and Maine ideals.”

Springvale Republican Sen. Jon Courtney also opposed it because of a procedural matter. 

The vote means the Legislature will take up the budget next Tuesday. 

The votes followed intense, behind-the-scenes negotiations, public hearings and committee work on Gov. Paul LePage’s initial proposal to cut $220 million in Medicaid health coverage for low-income Mainers over the current biennium. 

The budget nearly approved by lawmakers was less austere than LePage’s plan to eliminate health coverage for 65,000 Mainers. The Legislature’s plan would have filled the $120 million funding gap for fiscal year 2012, while eliminating coverage for 14,000 Mainers. It also would have allowed the state to pay its bills for the current year. 

The budget had been the focus of lawmakers’ attention since LePage unveiled his proposal in December. The plan was poised to receive bipartisan approval, but Senate Democrats increasingly sought to distance themselves from it.

Republicans, meanwhile, framed the proposal as a more “humane” alternative to the governor’s plan. They said the legislative budget created structural changes in Medicaid that would strike a middle ground of providing benefits to the truly needy and changing the state’s culture of dependency.

The floor debate may well foreshadow the rhetoric of the upcoming legislative election, when Democrats are expected to cast the GOP majority as out-of-touch with the needs of the working class. Republicans could counter that Medicaid changes implemented this year were long overdue for a state with diminishing revenues.

The budget debated Thursday is different from the spending plan that received unanimous support from the Appropriations Committee. It still achieves $120 million in savings while retaining coverage for so-called non-categorical Medicaid recipients (childless adults) who earn 133 percent above the federal poverty line.

Currently, parents earning 200 percent above the poverty line are eligible for Medicaid. LePage’s proposal would have reduced eligibility to 100 percent of the poverty level.

However, it achieves those savings differently from the mechanism that emerged from committee. Unlike the committee budget, the amended plan continues the drawdown of the Dirigo Health insurance assessment. The assessment taxes insurance providers to fund the state’s affordable health care program.

Last year, the new Republican majority passed legislation to draw down the Dirigo assessment after campaigning on the issue in 2010. The budget committee proposed halting the drawdown, a move that provoked the ire of the Maine Heritage Policy Center and a bloc of Republicans that could have blocked passage of the budget.  

Over the past few days, Democrats and Republicans found a way to continue the reduction of the Dirigo assessment. In return, Republicans agreed to a one-time adjustment that includes a payment to the state from hospitals in exchange for current Medicaid reimbursement rates. 

The governor had proposed cutting hospital reimbursements by $42 million. The new deal allows the hospitals to keep two-thirds of the current reimbursement in exchange for a $14 million payment to the state. The proposal had the support of the hospitals because the one-time payment booked long-term savings. 

Rep. Peggy Rotundo, D-Lewiston, said preserving the reimbursement rates for the hospitals was important to her community. Rotundo, however, said she rejected the budget in principle, if not with her vote. 

“This budget is not a Democratic budget,” she said. “Democrats don’t agree that taking health care away from Maine people who need it most will solve our budget problems. The budget shortfall was not caused by an increase in enrollment in MaineCare.”

She added, “This pursuit of eliminating people’s health care has been a distraction from the laser focus that is needed to reinvigorate jobs and the economy in our state.”

Rep. Patrick Flood, R-Winthrop,  acknowledged that the budget was an “imperfect document” and that there was “plenty to dislike.”

However, Flood said, the budget was a “humane” approach to fill the DHHS shortfall. He said it made needed changes in the Medicaid program.

“This bill doesn’t go far enough, yet it goes too far,” Flood said.

In the coming weeks, the Legislature’s budget-writing committee will take up another $89 million in Medicaid cuts for fiscal year 2013. Unlike the fiscal 2012 budget, next year’s spending plan is unlikely to get much support from Democrats who reject LePage’s so-called structural changes in Medicaid on ideological and legal grounds. 

smistler@sunjournal.com

This story has been clarified to relfect the number of people who will be losing health care coverage and to reflect Rep. Patrick Flood’s comment regarding the proposal.

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