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Maine’s New Governor Expands Medicaid

February 25, 2019
By Nicole Staley

Maine’s newly elected chief executive, Gov. Janet Mills, has instructed the state’s Department of Health and Human Services to move forward with Medicaid expansion.

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The expansion, approved by voters through a referendum in November 2017, had been blocked by previous governor Paul LePage, who argued the policy should not go into effect until the legislature found a way to fund it.

The expansion, declared on January 3 as Mills’ first executive order, will make MaineCare, the state’s version of Medicaid, available to at least 70,000 new applicants.

At the time of the referendum, 260,969 people were enrolled in MaineCare, according to the Kaiser Family Foundation. As of February 8, MaineCare enrollment numbers were rising at a “steady pace,” according to the Maine Department of Health and Human Services (DHHS), with 4,515 people receiving Medicaid-expansion coverage.

“There will be sufficient funds in the MaineCare account to cover this cost,” said the statement on the Maine DHHS website

Unexpected Costs

Under the provisions of the Affordable Care Act (ACA), Maine will receive $500 million per year in federal funding for the expansion. LePage had said he state’s share of the cost of expansion would be $60 million per year initially. The Maine DHHS projects the state’s share of costs for 2019 will be $25.6 million.

Medicaid expansion typically costs states much more than they expect, a 2017 study by the Maine Heritage Policy Center (MHPC) found. Expansion will cost Maine $400 million over the next five years, partly because of the 10 percent of expansion costs the federal government does not cover, the study states. The report also notes federal funding is not “free money,” because taxpayers from all states, including Maine, must pay for the federal share of the costs for the expansion population.

Eleven expansion states exceeded their budgets by at least 40 percent in the first three years, the report found.

Jacob Posik, communications director of the MHPC, says expansion will be a budget-buster for the state.

“Maine needs to dedicate a long-term funding source to Medicaid expansion,” said Posik. “Relying on surplus Medicaid funds will not work. There is simply not enough existing revenue to provide coverage to the estimated 70,000 Mainers eligible for expansion.”

‘Discourages Upward Mobility’

Another concern about expansion is workers intentionally settling for lower incomes or wages to qualify for MaineCare, Posik says.

“That happened between 2002 and 2006, when MaineCare was expanded under Gov. Angus King, because Medicaid benefits end abruptly instead of phasing out as a recipient’s income grows,” Posik said.

“Medicaid expansion discourages upward mobility because benefits are cut off for individuals who earn more than 138 percent of the federal poverty level, thus providing an incentive for individuals who earn just over this mark to limit or reduce their earnings in order to retain coverage,” said Posik.

Crowding Out the Neediest

The rules for Medicaid expansion give states a perverse incentive to shift resources away from the neediest people, Posik says.

“If a state finds itself in a position where it has to make cuts, it’s actually more fiscally sound to make cuts within traditional Medicaid than to make cuts within the expansion population,” Posik said. “For example, in Maine, we pay 36 cents on every dollar within the traditional Medicaid program. If we have to make cuts, we save an extra 26 cents on every dollar cut from traditional Medicaid vs. Medicaid expansion. This is what occurred in Arizona after an earlier Medicaid expansion cost the state about four times more than the original projections, forcing the state to eliminate coverage for heart, liver, lung, pancreas, and bone marrow transplants.”

Arianna Wilkerson, a state government relations manager with The Heartland Institute, which publishes Health Care News,says Medicaid expansion goes against the reasons the program exists.

“It has been a system designed to assure taxpayers’ hard-earned dollars go towards health care for certain low-income populations such as the disabled, the elderly, and pregnant women,” Wilkerson said. “Obamacare, however, allowed states to extend Medicaid coverage to able-bodied adults without children, effectively diverting public dollars from those who need it to those who do not. Maine should expect their traditional Medicaid recipients to experience longer waiting times for treatments and their non-Medicaid residents to experience increased taxes or cuts to government services in order to pay for the expansion.”

Nicole Staley(nicole.staley24@gmail.comwrites from Pensacola, Florida.

Internet Info:

“The Expensive Empty Promises of Medicaid,” Maine Heritage Policy Center: https://mainepolicy.org/project/medicaidexpansion/

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