Political tensions rise over $65 million MaineCare deficit

Posted March 14, 2009, at 3:11 p.m.

The Baldacci administration said Friday that the MaineCare program is facing an additional $65 million deficit over the next three months that will have to be filled with federal stimulus money.

That news prompted an angry response from Republican leaders, who accused Gov. John Baldacci of hiding the shortfall until Friday. Republicans also suggested that the incident could undermine the administration’s pledges of transparency.

“I’m beside of myself about the fact that we had a State of the State address on Tuesday with none of this information,” said Sen. Peter Mills, R-Skowhegan.

Finance Commissioner Ryan Low told members of two legislative committees on Friday that, as expected, the recession is driving up utilization of MaineCare services. MaineCare is the state’s Medicaid program that provides health care services to low-income residents as well as children, the elderly and disabled.

Low said usage of MaineCare is increasing across the board.

“As people lose their jobs . . . it shouldn’t be a surprise that people are looking for more assistance from Medicaid,” Low said in an interview Saturday.

Maine plans to use $65 million from federal stimulus money earmarked for Medicaid to cover the shortfall in this fiscal year that ends June 30. That would leave approximately $45 million for payments to hospitals.

An additional $40 million in stimulus funding will be used to cover anticipated deficits in fiscal years 2010 and 2011, although Low said Saturday that it’s impossible to predict how much will be needed.

Members of Maine’s GOP were livid Friday that they hadn’t heard about the additional shortfall earlier.

“This is extremely troubling news,” Senate Republican Leader Kevin Raye of Perry said in a statement. “It is also very disturbing that this information was unveiled on a Friday afternoon, less than 72 hours after the governor’s State of the State address, in which there was no mention of a gaping shortfall.”

Rep. Josh Tardy of Newport, who is the House minority leader, described it as a “very surprising and regrettable lack of communication” at a time when the Baldacci administration is promising transparency and cooperation regarding use of the federal stimulus money.

“What a mess we’d be in if we didn’t just have a Brinks truck roll up to the State House,” Tardy in an interview.

But Low and Baldacci spokesman David Farmer said lawmakers were fully aware that the state was likely facing a shortfall in Maine’s Medicaid program.

“We have been talking about increased Medicaid utilization for weeks,” Farmer said. “We just didn’t know how serious it is going to be.”

Farmer said the administration learned an approximate dollar figure a week ago Thursday or Friday but that the number continued to change this week. Farmer said that Low had offered to brief the committees on Wednesday but that the lawmakers opted to wait until Friday after Low returned from a stimulus-related trip to Washington, D.C.

Low estimated that the briefed the committees on the likelihood of a deficit at least four weeks ago, He also pointed out that some of the shortfall is due to legislative action, such as pushing prior year’s costs into the current fiscal year.

As for accusations that Baldacci purposely omitted the information from his Tuesday address, Farmer said Medicaid utilization is a complex subject that doesn’t lend itself easily to quick explanation in a speech targeting a mass audience. Instead, the goal was to realistically discuss the recession and outline plans to move the state forward, Farmer said.

“I don’t think we at all painted a rosy picture about the state of the economy,” he said.

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