Focus on Fixing MaineCare

Posted March 16, 2009, at 6:07 p.m.

Rather than arguing about who knew what when, lawmakers would be much more productive to look for ways to rein in Maine’s Medicaid costs.

Republicans in the State House expressed outrage late last week when the Baldacci administration presented the latest financial information about MaineCare, the state’s Medicaid program, which provides health care services to the poor, elderly, disabled and children. The program faces a $65 million shortfall over the next three months, administration officials told lawmakers on Friday. The administration plans to fill the gap with federal stimulus money.

Brenda Harvey, commissioner of the Department of Health and Human Services, has been talking about the expected shortfall for months. Administration officials say it was not known until last week how large the MaineCare gap would be.

Gov. John Baldacci should have told Republican leaders about the $65 million figure as soon as it was known.

Republicans also blasted him for not including this information in his State of the State address, which he delivered last Tuesday. The governor didn’t talk specifically about the nearly $1 billion budget gap the state faces over the next two years either. Instead, his speech was more upbeat, focusing on Maine’s opportunities for economic growth.

This disagreement is a distraction from a much larger problem: The growth in MaineCare costs is not sustainable. The $65 million gap is caused largely by the recession. Many people who lose their jobs become eligible for MaineCare benefits, increasing demand for services, which are paid for by the state and federal government. Because the cost increases are tied to the economic downturn, the state, along with most others, can use a portion of the federal stimulus funds to close the MaineCare gap. In addition to the $65 million for this year, the state expects to use another $40 million in stimulus funding to cover the MaineCare shortfall in 2010 and 2011. If the economy does not improve by then, the gap could grow.

Even before the downturn, the growth in MaineCare costs was a concern. But, attempts to reduce costs — or even just study ways to lower costs — have failed in the Legislature, with Democrats generally opposing cuts in benefits and Republicans generally opposing reductions in hospital and pro-vider payments.

In recent years, DHHS has proposed to eliminate the podiatry benefit and to require prior authorization for radiology for MaineCare recipients. In 2007, Rep. Dick Woodbury, an independent from Yarmouth, proposed an independent study of MaineCare. He especially wanted to compare Maine’s services and eligibility against national norms. Lawmakers, led by Democrats, rejected these proposals.

As part of his biennial budget, the governor proposed to reduce state payments to hospitals and hospital-based physicians. To improve the stability of several hospitals in rural areas, they are paid 117 percent of their costs by the Medicare and Medicaid systems. Gov. Baldacci proposes to drop that to 101 percent. These proposed cuts have been criticized by Republicans.

On a much smaller scale, this situation highlights the need for radical health care reform in both the publicly and privately funded sectors. Until then, finding ways to lower costs is a top priority.

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