News that Gov. John Baldacci will ask the Obama administration for a Medicaid waiver for Dirigo Health is not exactly news; the waiver, which would match federal funds to Dirigo premium payments, was part of Dirigo 1.0.

If granted – a significant “if,” given it’s been denied before – the waiver would deliver two-for-one matches on Dirigo premiums paid by Medicaid-eligible persons, according to the Capitol News Service.

This would be literally pennies from heaven for cash-strapped Dirigo, whose new funding source (beverage taxes) was rejected and whose current funding source (the Savings Offset Payment) is having its legality challenged anew.

But a waiver poses a problem: If Maine gets more Medicaid money, funding Dirigo isn’t the top priority.

Medicaid’s $300-plus million debt to Maine hospitals should arguably be paid first.

This debt is growing faster than the government’s ability to pay it; some hospital officials have estimated the gap is maturing at the actuarially alarming rate of $10 every minute.

Central Maine Medical Center is owed $68 million, St. Mary’s Regional Medical Center $12 million and Franklin Memorial Hospital $25.5 million. That latter hospital has since sued the state to pay its MaineCare bill in full, and stop accruing any more debt. That suit is pending. So are the payments.

And with tight budget times on the horizon – both on the state and federal levels – the outlook for repaying this debt is probably the grimmest in memory.

More money for Dirigo would stabilize the program and perhaps re-open enrollment, which is capped. A stronger Dirigo could reduce more of Maine’s uninsured, and give more access to care. Research into cost saving measures through the Maine Quality Forum could also be enhanced.

But more money for Dirigo won’t improve health care delivery as much as relieving hospitals from the burden of unstoppable Medicaid debt would.

Maine’s Medicaid system is generous and expensive. An expansion in 2002 is cited for the reimbursement gap, as greater utilization drove up costs. The unabashedly conservative Maine Heritage Policy Center released a report in November saying welfare spending (which includes MaineCare) is tops in the nation, in terms of burden on income.

Amid this spending, though, hospitals aren’t paid. There are consequences: Doctors turn away Medicaid patients, costs for the privately insured increase, or quality of care declines.

These possible outcomes call for paying hospitals first, if more Medicaid money flows into Maine.

And that makes it tough to explain why Dirigo should be saved, instead.