AUGUSTA — A consultant’s report that shows expanding Medicaid in Maine could cost the state $807 million over 10 years renders the proposal unaffordable, Department of Health and Human Services Commissioner Mary Mayhew said Friday.

The long-awaited report’s findings were presented at a news conference by Mayhew and Gary Alexander, the author of the report and founder of the Rhode Island-based Alexander Group.

“The Alexander Group’s financial model demonstrated that Maine can hardly afford the MaineCare program now, and it will continue to annex larger shares of Maine’s state revenue in the future,” according to the report. MaineCare is the state’s Medicaid program, which provides health coverage for low-income people and people with disabilities.

Democrats dismissed the report as politically driven, cited Alexander for “mismanagement” in Pennsylvania and referred to two national studies indicating Maine would actually save millions of dollars by expanding Medicaid. (See related story.)

When a reporter sought to question Alexander about his controversial background, Mayhew cut him off, saying: “I’m not going to waste my time, the department’s time, the state’s time. This is about the report.” 

According to the Alexander report, MaineCare enrollment is expected to grow from 318,000 to about 382,000 in the next 10 years if the state does not expand the program. By expanding coverage to include people whose incomes are 138 percent of the federal poverty level, the report says:

* MaineCare will add 98,873 people in 2014-15.

* MaineCare enrollment will grow from about 318,000 to 584,000 in 10 years.

* State and federal costs will grow from $6.3 billion to $9.4 billion from 2013-14 to 2023-24.

* Currently, 22.6 percent of Mainers receive MaineCare benefits. That could grow to 36.5 percent by 2023-24.

“This study reinforces the unsustainable costs associated with MaineCare expansion and the importance of returning the program to one that cares for its most vulnerable,” Mayhew said, reading from a prepared statement.

“We cannot, in good conscience, ask the taxpayers of Maine to foot this very large bill to care for able-bodied adults,” she read. “We must prioritize spending to ensure that the elderly and people with developmental disabilities who are on wait lists — sometimes for more than two years — get the critical services they need first and foremost.”

In response to a reporter’s question suggesting that the state might be able to afford to cover those currently on MaineCare and to accommodate additional recipients, Mayhew said: “We’ve had more than a decade of tens of millions of dollars of shortfall budgets in the Medicaid program.”

She added, “The financial foundation is crumbling under this program. We have unmet needs today, providers with reimbursement rates that are inadequate. We are not making the kind of investments in primary care services, recovery services, services along the continuum that absolutely have got to be part of the overall equation in order to ensure that we are looking comprehensively at the financial challenges facing this state.”

The Alexander Group was awarded a no-bid, $925,200 contract to study Maine’s welfare system and issue a five-part analysis. The first part of that report, meant to examine the impact of a possible Medicaid expansion in Maine, was delivered last month. The second part was due Dec. 20 and has not yet been delivered.

Information in the report is likely to form some basis for the governor’s position opposing a proposal before the Legislature to expand MaineCare.

Expansion, a key provision of President Barack Obama’s landmark health care reform law, would provide taxpayer-funded health care to 70,000 additional Mainers. It would be paid for in large part by the federal government for the first three years, and is a top priority for Democrats this year.

The effort was defeated by gubernatorial veto in 2013, and Mayhew has given a number of public presentations in the past several months warning against expansion because Maine’s share of the cost would break what Mayhew says is a fragile DHHS system. 

According to Mayhew, expanding that program would drain resources needed for other necessary social services and state programs, including building roads and funding education.

The governor and Republican lawmakers have defended the Alexander contract, calling the consulting company the “best” welfare-consulting group in the country. Referring to Alexander, LePage spokeswoman Adrienne Bennett has said, “He has a track record with working with the federal government and working to receive flexibility for (Medicaid) plans that work with various states,” including winning a global Medicaid waiver from the federal government for Rhode Island, giving that state unique flexibility in administering its publicly funded health coverage.

The final recommendations from the Alexander Group may or may not be implemented, based on what the Legislature decides. The last portion of Alexander’s report is not due until May, after the Legislature adjourns.

The Maine DHHS contract with Alexander is expected to cost $925,200; of that, $454,875 will come from the General Fund; $276,644 will come from specially dedicated revenue; $193,680 is federal funding; $69,120 will be drawn from the Temporary Assistance for Needy Families budget; and the remaining $124,560 will come from MaineCare funding.

The first part of the report was expected to cost $108,000 and was delivered at a cost of $54,000. The next two parts, both of which were due Dec. 20, are expected to cost $276,480 and will include recommendations for welfare reform. The last part of the plan, due May 15, is expected to cost $454,320 to fund a systemwide review of Maine’s welfare system integrity and produce an action plan.

Under the contracted payment schedule, Alexander has already been paid $246,720 of the total contract price. The next payment of $61,680 is due to be paid on Jan. 15.

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AUGUSTA — Democrats criticized the Alexander Group report on Medicaid expansion Friday, calling it politically motivated and saying two national studies show Maine would save millions by expanding Medicaid.

“It’s no surprise to see the governor’s tea party consultant issue an ideological and politically driven report,” said House Speaker Mark Eves, D-North Berwick. “Maine people should see this for what it is: yet another political excuse to deny and delay health care to tens of thousands of Mainers. Independent studies show time and again that Medicaid expansion is lifesaving health care that will create jobs and save money.”

The Democrats’ statement referred to analyses by the nonpartisan Kaiser Foundation and the right-leaning Heritage Foundation showing Maine and a few other states could save millions of dollars by expanding Medicaid — spending less on uncompensated care and other savings — while treating more people and saving lives.

“There’s nothing in this report that is a surprise,” said Senate President Justin Alfond, D-Portland. “This is essentially the same report that Alexander wrote for two other states. Now that the distraction of this report is over, let’s get back to what is really important: making sure that 70,000 Mainers have access to the care they need so that no one has to fear a medical emergency will lead to bankruptcy.”

The Democratic response also criticized Alexander Group owner Gary Alexander for his “record of mismanagement and failed policies in Pennsylvania. As the head of Pennsylvania Department of Public Welfare, Alexander cost state taxpayers $7 million and took health care away from 89,000 children.”

Feasibility of Medicaid Expansion under the Affordable Care Act: A Review Submitted to the Maine Department of Health & Human Services

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