AUGUSTA, Maine — Gov. Paul LePage reiterated the need for a sweeping overhaul of MaineCare at the State House on Thursday, while elsewhere in the building scores of opponents testified before lawmakers for a second day.

At a public hearing on the governor’s proposed cuts to MaineCare, many spoke out against planned funding rollbacks for mental health services and substance abuse programs, as well as a loss of benefits for some low-income adults. A handful of supporters stepped to the podium in favor of the reforms.

Others, including the advocacy group Maine Equal Justice Partners, questioned the proposal’s legality, saying it violates a key provision of the federal Affordable Care Act. The provision essentially prohibits states from making it more difficult to enroll in Medicaid, such as through stricter eligibility requirements, as state health insurance exchanges mandated by 2014 are established. MaineCare is the state’s version of the federal Medicaid program.

LePage’s proposal, designed to address an estimated $220 million shortfall in the Department of Health and Human Services budget, calls for tightening eligibility guidelines, eliminating services and repealing coverage for thousands of recipients to bring MaineCare closer to national averages.

At an afternoon press conference, LePage confirmed that his proposal violates the Affordable Care Act provision and said the state will seek a waiver from the federal government. U.S. Health and Human Services Secretary Kathleen Sebelius has instructed LePage to first win legislative approval for his plan, he said.

“I will not get a waiver from the federal government until the Legislature says they want it, and the Legislature says it’s illegal,” LePage said. “Well put me in jail and we’ll go from there.”

His plan is the only way to keep the unsustainable MaineCare program from going broke in the spring, the governor said.

“We actually have more people in the system taking away than we have people putting into the system to pay for the services, and it’s a gap,” he said. “We are far more generous than most other states in the union. And until we recognize that and we spend what we can afford and do the best we can with what we have available, we’re going to continue to have this problem.”

The governor also presented an unconventional remedy for the more than 4,000 people expected to lose housing under his plan. LePage is seeking to save $47 million by eliminating funding for residential facilities for the mentally and physically disabled, known as “private, nonmedical institutions.” If lawmakers award the executive branch more oversight of MaineHousing, the state’s quasi-governmental affordable housing agency, his administration could find ways to offer alternative homes for those affected by the cuts, LePage said.

“I believe that the Legislature has got to give the executive branch a little bit more authority over, or some authority, to work with Maine State Housing,” he said.

State Treasurer Bruce Poliquin, who attended the press conference, recently has sparred with MaineHousing Executive Director Dale McCormick over the agency’s fiscal management. McCormick was appointed by Gov. John Baldacci.

Democrats labeled the press conference a tactic to draw attention away from the public hearings.

“It’s not helpful for the governor to continue to have press conferences and distract from the impact of the budget,” said Rep. Mark Eves, D-North Berwick, the lead Democrat on the Health and Human Services Committee. “He’s trying to manufacture an environment of crisis to push through his agenda.”

LePage also said he will ask the Legislature to fast-track implementation of LD 1333, the state health insurance reform bill that passed earlier this year, and ruled out raising taxes to cover the shortfall, as some public hearing attendees suggested Thursday.

Carol Austin, a health care worker who submitted written testimony, urged lawmakers to target funding for DHHS services that encourage dependency rather than hike taxes.

“These folks get all the benefits and the abuses I see as a health care provider makes me ill,” she wrote. “Please do not vote to increase taxes on those of us at the lower levels while those who do the least get the most.”

Concern about cost-shifting was a common thread throughout the public hearing. Attendees said LePage’s proposal would limit access to basic health services, pushing the needy toward more expensive crisis care.

“The loss of federal matching Medicaid funds will be felt by providers, hospitals and private health care professionals throughout Maine, but particularly in service center communities like Bangor,” said Shawn Yardley, director of health and community services for the city.

Testimony was expected to continue Friday, with lawmakers hearing public comment on the cuts’ impact on the Fund for a Healthy Maine and hospital reimbursements, among other issues.

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