MEXICO — Citing rising costs and reduced revenues, Med-Care Ambulance is requesting a $17 per capita subsidy increase, from $28 to $45, from the service’s 11 member towns.

As Chairman Richard Philbrick, left, listens, Mexico Selectman Cliff Stewart addresses the Board of Selectmen last Tuesday about Med-Care Ambulance’s request to increase member towns’ per capita subsidy from $28 to $45.

An informational session on increase is scheduled for 7 p.m. Wednesday at Med-Care’s headquarters at 290 Highland Terrace.

Notification of the increase was made to towns in an Oct. 2 letter from Med-Care.

It was discussed Oct. 15 at the Mexico selectmen’s meeting.

“My recommendation to the board is not to pay the increase in January, and to take it to arbitration,” Town Manager Jack Gaudet said.

“The reasoning I have is that they’re coming in the middle of our budget season and we are not budgeted for an increase. We do not have the funds in our contingency account without going to the people.”

Board Chairman Richard Philbrick said a special town meeting and vote would be needed to approve the money.

Selectman Reggie Arsenault, a town representative on the Med-Care board, said there has been some talk about foregoing payments of the increase from January to June, then catching up on them beginning with the new town budget year in July 2020.

“In June of 2018, we signed a 10-year agreement with Med-Care. At the time, we paid $24 per capita, which was about $63,000 for Mexico,” Selectman Cliff Stewart said.

Stewart said in February 2019 the town had a one-time assessment charge of $4 per capita, bringing it to $28, which resulted in more than $10,000 paid by taxpayers.

With the $17 per capita increase announced Oct. 2, that makes it $45 per capita, or a $118,000-per-year assessment for Mexico.

Stewart said that’s an increase of $45,000.

“I do not believe in coincidences,” Stewart said. “I think the Med-Care Board was a little bit disingenuous, at best, in June when they circulated their 10-year agreement, waited for that to be signed, and then, within a year and a half, we’ve gone up over 70%.”

Arsenault said: “It was never our intention to go up on anything. We tried our best to keep it as low as possible, but our costs have gone up.”

He said he understood the reason for the increase, but he voted not to support it.

Gaudet and selectmen encouraged residents to attend Wednesday’s meeting.

In an Oct. 2 letter to selectmen, Robert Chase, president of the Med-Care board of directors, detailed three reasons for the subsidy increase:

• The minimum wage has increased $3 per hour between 2017 and 2020, which affects virtually all employees. The cumulative effect since 2017 will result in $144,500 more in payroll expenses in 2020 if wages had increased 2 percent through the same period.

• Revenue from Affordable Care Act has continued to decline while the call volume is generally increasing. Medicare only reimburses Med-Care at 80% of its charges and Medicaid at about 50%.

• In trying to keep subsidies low in spite of rising costs and reduced revenues, Chase said Med-Care has allowed its vehicle fleet to age. Most of the equipment bought in recent years has been acquired through financing. Continuing to borrow only increases interest expense and operating costs, he said.

“The insurance companies have adopted the Medicare rates for all intents and purposes,” Chase wrote in his letter. “The ACA has resulted in insurance companies offering insurances that have high deductibles. Because we’re the initial provider of services, we feel the heaviest impact of the deductible.

“The deductible amount falls on the individual receiving our services as part of our self-pay revenue. Even though we try diligently to collect this amount, it’s very difficult. We use a collection service and have an aggressive collection protocol, but many people do not pay.”

Chase said the past five or six years have been difficult and Med-Care has needed to increase subsidies, but the organization is still not in a good financial position and is looking to increase subsidies again.

According to the ambulance service, to address the operational shortfall caused by the decreased revenue and increased expenses, a subsidy of $11 per capita is required.

Additionally, Med-Care said it needs a replacement ambulance and the board has approved an additional $6 per capita for capital needs. This will result in a total subsidy increase of $17 per capita, bringing the total assessment to the towns to $45 per capita.

Along with Mexico, the member towns are Andover, Byron, Canton, Carthage, Dixfield, Hanover, Newry, Peru, Roxbury and Rumford.

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