Expanded Medicaid challenge to Maine

Posted July 22, 2009, at 9:58 p.m.

Among the many changes to the nation’s heath care system under consideration in Washington, an expansion of the Medicaid program is a virtual certainty.

In Maine, where almost 20 percent of the population already is covered by the program, state officials and other experts say a federally mandated expansion could pose a significant challenge — but less so here, perhaps, than in some other states.

“The worry is what will happen [in Medicaid] and who will pay for it,” said Trish Riley, director of the Governor’s Office of Health Policy and Finance. While a Medicaid expansion is “foundational” to national health care reform, Riley said Wednesday, “we want to make sure there is no unfunded mandate and that there are op-portunities for states to be innovative.”

But because MaineCare, as Maine’s Medicaid program is called, is already open to some higher-income groups than many other states allow, the proposed expansion would be less of a problem here than in other places, she said.

Tarren Bragdon of the conservative Maine Heritage Policy Center takes a harder line. Medicaid’s mission is to cover the most disadvantaged Americans, he said, and relaxing income guidelines for eligibility will undermine this vulnerable population.

“At this time of unprecedented deficits at both the state and federal level, when the government is already having trouble keeping its promises to the poor and disabled, we can’t expand the Medicaid program to the middle class,” he said.

Bragdon said making private coverage more affordable is a better way than expanding Medicaid to reach working people who don’t have coverage.

Medicaid, which pays for medical and mental health care for low-income people and those with mental and physical disabilities, is funded by a combination of state and federal dollars. States must pay for the program out of their general funds in order to draw matching federal dollars; on average, each state dollar attracts three federal dollars.

Maine’s biennial budget calls for about $900 million in state-funded MaineCare expenditures and anticipates about $3 billion in federal matching money.

This formula makes Medicaid a good deal for states. But now, even this favorable funding can’t help states come up with their share of the money. Medicaid budgets have been slashed. In some states, eligibility guidelines have been lowered so fewer people qualify for coverage. Other states, including Maine, have cut deeply into the list of services covered.

The health reform bill in the House of Representatives would set baseline Medicaid income eligibility at 133 percent of the federal poverty level, or $29,300 for a family of four. States such as Maine that already allow higher household incomes for some enrollee groups such as children and pregnant women would have to main-tain those thresholds while raising their baseline to meet the new national threshold.

Maine’s baseline eligibility is now set at 100 percent of federal poverty level. Riley said state officials have not calculated the number of additional enrollees the proposed 133 percent expansion would bring into the program.

The House bill would have the federal government pay all costs for those who become eligible under the new threshold. In an early version of the Senate bill, which is still under wraps in the Senate Finance Committee, the federal government would pay the difference for five years, then hand responsibility back to the states.

Senate Minority Leader Kevin Raye, R-Perry, said he finds the proposed Medicaid expansion “disappointing and shocking.”

“I don’t think burdening states with increased costs is the answer,” Raye said. “I am puzzled that Washington would seriously consider this as an option.”

But Rep. Ann Perry, D-Calais, House chairman of the Legislature’s Health and Human Services Committee, said expanding Medicaid won’t really change anything unless the larger health care system also changes.

“It will be a struggle no matter what,” she said. “We pay for [the uninsured] now in lost wages, unreimbursed care and higher insurance premiums.”

Perry said the federal expansion will create a burden for states, but that the real issue is the cost of health care services. “We’ve really got to look at what the cost drivers are in the system,” she said. “Until we identify and gain control of cost, we’ll have an issue in how we afford it.”

At the Muskie School of Public Service at the University of Southern Maine, health policy professor Andrew Coburn said expanding Medicaid is an effective way to provide coverage to the uninsured. “But the big problem is that Medicaid has been a poor payer for hospitals and other providers,” he said Wednesday. That means that even though people have coverage, it can be hard to find providers who will care for a population that tends to have more health care needs than average.

All states, including Maine, he said, will be challenged to expand their Medicaid programs if federal reform legislation requires them to do so.

mhaskell@bangordailynews.net

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