AUGUSTA – Beginning March 3, Maine government stands to lose an estimated $45 million from the feds for Medicaid programs that support the elderly, the disabled and the mentally retarded, based on a series of rule changes made by the Centers for Medicare and Medicaid Services.

An additional loss of $141 million in federal Medicaid spending will affect Maine nonprofit providers and schools, according to a statement by Maine’s Department of Health and Human Services and Department of Education.

The rule changes come at a time when the state already faces a budget shortfall estimated to be between $100 million and $200 million.

The state Revenue Forecasting Committee will meet Monday to update its budget projection and present lawmakers with a clearer picture of how deep cuts will have to be.

Maine’s congressional delegation is united behind bills that would delay the implementation of the Medicaid rule changes. U.S. Reps. Tom Allen and Mike Michaud, both Democrats, have co-sponsored legislation in the House, and Maine’s two Republican senators, Susan Collins and Olympia Snowe, support similar bills in the Senate.

But Congress is not likely to act before the first Medicaid rule change takes effect March 3, and Collins said the state should be cautious of depending on Congress to come to the rescue.

“I don’t know what’s going to happen, but I would be wary of predicting complete success on all of these rules,” Collins said. “But to spring this on the states and to not evaluate the impact on some of the most vulnerable people in our society is just wrong.”

The loss of federal funding, in conjunction with Maine’s already troubling budget situation, is forcing state officials to make painful decisions about where to make additional cuts.

State Sen. Peggy Rotundo, co-chairwoman of the Joint Standing Committee of Appropriations and Financial Affairs, said the state has to act quickly.

“Things are up in the air at this point, but we have a very short time frame in which to do this work,” she said. “We just have to keep moving forward.”

The Legislature has until mid-April to create a balanced budget, according to Maine law.

DHHS and the Department of Education will suffer the most financially when the federal rules change. DHHS has already proposed $64.9 million in cuts to its budget and Commissioner Brenda Harvey presented ideas for $33.8 million in further cuts to legislators late last week.

Some argue that Maine depends too much on federal Medicaid dollars and that this cutback presents the state with an opportunity to shift its priorities.

“What do we want Maine Medicaid to look like – large and expansive, or focused on the most vulnerable?” asked Tarren Bragdon, chief executive officer of the conservative Maine Heritage Policy Center.

Bragdon suggests the state “scale back” income eligibility limits for nondisabled parents and childless adults in order to pay for the federal cuts to the state’s “most vulnerable and needy” populations.

Rotundo said people are often in favor of cutting back on services until they learn how those cutbacks affect them.

“What’s hard is that people’s expectations for government grow at the same time that people want less government,” Rotundo said. “That’s the conversation in the state that we need to have, because you can’t have both. You can’t be scaling back MaineCare but at the same time want the same services for your loved ones.”

Kathy Bubar, DHHS’ director of integrated services, said the loss of federal dollars will directly affect the state’s “most vulnerable.”

“These are not luxury services,” she said. “Maine has embraced most of what the federal Medicaid program refers to as ‘optional services,’ but understand that these services are things like letting kids (on Medicaid) see dentists … it’s not like we’re paying for dance lessons.”

Jaci Holmes, the federal liaison for the Department of Education, said the state will now have to increase funding in some of the areas targeted for federal cuts because the services are required, ironically, by federal law.

“While this is certainly not the time to be in need of seeking additional money from the state general fund, we need to comply with our federal special education statute,” Holmes said.

These funding changes will likely result in cuts in other areas, Holmes said.

Rotundo agreed.

The state, despite its budget shortfall, will be forced to spend more money on programs the federal government requires by law but now refuses to pay for, she said.

“That money has to come from some place, so there will be other cuts as a result,” Rotundo said. “You’re talking about peoples’ lives. It’s heartwrenching.”