AUGUSTA, Maine — Opponents of Gov. Paul LePage’s plan to close a $220 million shortfall at the Department of Health and Human Services pitched alternatives Wednesday in the wake of the governor’s State of the State address.
Engage Maine, a coalition of progressive groups, proposed reforming MaineCare without dropping any recipients from the rolls and ending tax breaks for Maine’s wealthiest residents. The coalition said it hoped to spark conversation about responsible ways to address the shortfall without sacrificing services to Maine’s elderly, disabled, children and the poor.
“What Gov. LePage has presented is dangerous and irresponsible, which is really why we presented these alternatives,” Ben Dudley, executive director of Engage Maine, said by phone after a noontime press conference.
LePage has proposed overhauling MaineCare, the state’s version of the federal Medicaid program, to close the DHHS shortfall over the next year and a half. His plan w ould eliminate coverage for 65,000 recipients, tighten eligibility requirements and cut services to bring MaineCare closer to national averages for public health benefits. He reiterated during Tuesday’s State of the State address that the program will run out of money in early April without his cuts.
The Legislature’s Appropriations Committee is deliberating over LePage’s plan and could take a final vote before the week is out.
Engage Maine said the state’s wealthiest 1 percent pay an effective state and local tax rate that’s 12 percent lower than the average Mainer’s. Making residents who earn more than $350,000 a year pay “their fair share” at the average state tax rate and restoring the 2010 tax rate for those earning more than $200,000 annually would generate $72 million a year, said Garrett Martin, executive director of the Maine Center for Economic Policy, a member of Engage Maine.
He pointed out that the state is spending less General Fund money than it did in 1998, in inflation-adjusted dollars.
“We don’t have a spending problem here,” Martin said. “What we have is a revenue problem.”
Raising taxes won’t solve a shortfall driven by rising MaineCare enrollment and greater use of health services, Adrienne Bennett, a spokeswoman for LePage, said Wednesday. “We can’t tax our way out of a problem of this magnitude,” she said.
Engage Maine’s plan also includes longer-term fixes. It does not fully address the immediate $220 million shortfall at DHHS.
The coalition proposed better managing care for MaineCare’s most costly recipients to prevent expensive acute and emergency room treatment and eliminating reimbursement costs for avoidable conditions. Engage Maine also advocated that MaineCare serve only as a last resort for residents with access to private health insurance and veterans benefits.
“We’re talking about the long-term sustainability of the program that is not only more efficient but also leads to better care,” said Sara Gagne-Holmes, executive director of Engage Maine member Maine Equal Justice Partners.
Bennett said LePage’s plan does just that, while preserving MaineCare coverage for 280,000 of Maine’s most vulnerable residents.
“Right now, we need to focus on creating a sustainable system, one we can afford,” she said.
Engage Maine was joined by representatives from the Maine Medical Association, the Maine Small Business Coalition and the Roman Catholic Diocese of Portland.
The medical association also joined a separate call by health care advocates to raise Maine’s $2-per-pack cigarette tax to help close the DHHS shortfall. Hiking the tax to $3.50 a pack would generate $48 million in fiscal year 2013, as well as reduce teen smoking rates and lower short-term health care costs, the coalition said in a press release.
Tobacco use costs Maine’s health care system more than $600 million every year, $216 million of which MaineCare picks up, the coalition said. LePage’s plan slashes state funding for tobacco prevention and cessation programs.
The governor maintains his previously voiced opposition to a cigarette tax increase, Bennett said.