By any measure, the Department of Health and Human Services has created a huge budget hole. Just five months after the two-year state budget took effect, Commissioner Mary Mayhew discovered – if that’s the right word – that programs will run $70 million short, a figure she upgraded to $120 million two weeks later.
To date, Mayhew has offered no convincing explanation for the discrepancies, nor did Gov. Paul LePage provide details on Tuesday in his response to this self-created fiscal crisis, saying only that the administration relied on projections from previous budgets and that federal aid has been “reduced.”
Neither explanation is helpful.
Maine has no legislative budget office to provide spending projections — that’s the sole responsibility of the administration. We don’t even know whether the problems come from higher enrollment, billings by providers or administrative expenses. Mayhew, undoubtedly, expanded the knowledge gap when she sacked a dozen top managers, including those who ran Medicaid.
And contrary to LePage’s claim, Medicaid reimbursement has been “reduced” only in the sense that federal aid from the American Recovery Act stimulus is expiring. Maine still has a favorable match rate, reflecting its low incomes, bringing in two federal dollars for every one Maine provides.
But LePage did not hesitate to use unexplained and unverified shortfalls as a reason to slash DHHS spending by $221 million. He’d eliminate funding for successful programs like Head Start for poor kids, while drastically cutting Low-Cost Drugs to the Elderly and the Fund for a Healthy Maine.
But the biggest single cut would hit poor adults without children, now eligible for Medicaid if their income is less than 133 percent of the federal poverty level — $14,500 a year for individuals. In 2002, Maine extended benefits to these adults, because even though most have jobs, almost none of those jobs include health insurance. Mayhew’s suggestion that these adults could now obtain private coverage is a grim joke. It would consume half their income.
And there are other flaws to LePage’s theory that kicking 65,000 Mainers off Medicaid will unburden the state budget and somehow improve the economy.
Hospital emergency rooms, which under federal law cannot turn anyone away, will again become the standard treatment for the newly uninsured — at far higher costs and no compensation to hospitals.
Further, as the administration well knows, the very people removed from Medicaid in 2012 will have to be re-enrolled less than two years later. As part of the Affordable Care Act (Obamacare to detractors), states will have to insure all adults under 65 up to 133 percent of poverty — the standard Maine uses. As the Medicaid website explains, “For the first time, low-income adults without children will be guaranteed coverage through Medicaid in every state without the need for a waiver.”
Republican legislators – without mentioning LePage’s actual proposal – continue to argue that Maine’s Medicaid program is “unsustainable” and must be cut back. We hear over and over that Maine’s enrollment is higher than the national average, which is true, but beside the point.
Maine now enrolls 22 percent of its residents in Medicaid, against a national average of 16 percent. But Vermont has a 21 percent rate and Massachusetts, 19 percent. In New England, only Connecticut at 11 percent and New Hampshire at 8 percent are substantially lower. In Connecticut, the nation’s highest per capita incomes mean there are few poor people and New Hampshire, uniquely, does not believe in state taxation.
In fact, unless you think 49 million Americans should be permanently excluded from health care – a claim even Obamacare critics shy from – Medicaid looks pretty affordable. It’s per-person rates are lower than any other government program and are far lower than any private insurance plan.
Republicans are correct that there’s something unsustainable about health care, but it’s not Medicaid. Rather, it’s the money America showers on health care without getting good results. We spend 50 percent more than the next biggest spender, Norway, and double the average of the developed world – whose nations all have universal coverage and would never dream of leaving 15 percent uninsured.
Those larger realities aren’t going to fill Maine’s budget gap – whatever it finally turns out to be – but there are alternatives. The budget provides $168 million in tax breaks, which disproportionately benefit the wealthiest 1 percent of Mainers. People who need Medicaid won’t see a nickel.
Wouldn’t it make more sense to postpone tax cuts a year than to deny thousands of Mainers health coverage – coverage that will soon have to be restored anyway?
By the time LePage’s budget plan is reviewed later this week, Democrats may not be alone in asking these questions.
Douglas Rooks is a former daily and weekly newspaper editor who has covered the State House for 25 years. He may be reached at [email protected].
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