AUGUSTA (AP) – Estimating a Medicaid shortfall for the upcoming fiscal year at $128 million, Gov. John Baldacci on Friday proposed a benefit redesign package to help cover the gap from July 1 through June 2005.

Baldacci said his “overview,” featuring ways that might be characterized as shrinking the Medicaid program to save it, would be fleshed out in the near future with a formal presentation to the Legislature’s Appropriations Committee.

At a briefing for reporters, Baldacci said basic eligibility for subsidized health services would be maintained but that the array of services offered to some beneficiaries would be scaled back under his plan.

The number of program recipients that would be affected was not immediately available, top Baldacci health aide Trish Riley said. Overall adjustments in MaineCare, as the state Medicaid program is known, were pegged at $81.6 million.

Baldacci described the steps he would use to generate savings as “prudent and reasonable,” and virtually unavoidable in light of fiscal pressures on the state.

“This is an important program … but we’re facing financial challenges,” the Democratic chief executive, who had previously briefed ranking legislators, said at a crowded news conference. “Frankly, this is not a pleasant experience,” he added.

With few lawmakers at the State House, provisions of the governor’s overview were just circulating.

“The budget proposal reflects a careful review of existing MaineCare benefits, and the Appropriations Committee will make an equally careful review of the many changes and revisions proposed in this budget when it begins its public hearings,” Democratic House Speaker Patrick Colwell of Gardiner said in a statement.

“We heard a partial outline of some of the governor’s ideas and are looking forward to the detailed proposal,” said Republican Rep. Richard Rosen of Bucksport, an Appropriations Committee member.

One high-profile item not addressed in the governor’s plan that was noted by some legislators was renewal of funding for payments to victims of abuse at Maine’s school for the deaf.

In designing a package to cope with the $128 million Medicaid shortfall and repay $10 million to a retiree health insurance fund, the governor is also calling for about $22 million in new General Fund spending for a variety of departments and programs, including a $9 million hike in general purpose aid for education.

Another major piece of the new spending being proposed would be about $3.5 million in reclassification pay boosts for state police, warden service and marine patrol personnel and other enforcement officers.

About $3 million would be channeled to mental health programs and projects, with $2.7 million going to corrections to deal with prison overcrowding.

Baldacci administration officials said the governor’s latest supplemental budget proposal would offset shortfalls of $700,000 in general assistance and about $930,000 in the circuit-breaker property tax relief program.

The package would also free up about $417,000 for the Governor’s Office of Health Policy and Finance, Baldacci budget chief Rebecca Wyke said.

Balancing the budget through fiscal 2005 would rely on more than $9 million in Powerball lottery revenue and another $9 million in taxation department initiatives.

The Baldacci administration plan counts on a gain of nearly $38 million by divesting from the internal service fund for retiree health. Administration officials said there would be no effect on retiree health benefits.

The focus of Baldacci’s news conference, however, was on Medicaid program adjustments and cuts, which aides said could include dental services as well as physical, occupational and speech therapy.

Administration officials said more than half of the MaineCare shortfall – $70 million – was attributable to changes in federal matching fund rates.

Anticipating questions from lawmakers, Baldacci said for now he would ask people to “not react immediately.”

Last March, lawmakers overwhelmingly approved a $5.3 billion budget package that set in place a blueprint for financing state government operations through June 2005.

Last month, over Republican opposition, Baldacci and his Democratic legislative allies enacted a plan for offsetting a $109 million Medicaid shortfall through June.

To finance much of those news expenditures, Baldacci would phase out the state’s homestead exemption program.

AP-ES-03-05-04 1732EST



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