AUGUSTA, Maine — Health and Human Services Secretary Kathleen Sebelius told members of the U.S. Senate Finance Committee on Wednesday that she has told Maine Gov. Paul LePage what the state’s options are to change Medicaid and offered to send a team to help the state craft a plan that will pass federal muster.
“We again made it clear to him what was within the state’s discretion,” she said, addressing questions in Washington posed by Sen. Olympia Snowe, R-Maine, a member of the committee. “We volunteered to send a team in to look at their other choices, but we did not have a lot of paper from the Governor about what exactly was the proposal.”
LePage has proposed closing a $220 million, two-year shortfall in the state’s Department of Health and Human Services budget by overhauling MaineCare, the state’s version of the federal Medicaid program, to bring it closer to national averages for public health benefits. His plan would drop 65,000 people from coverage, tighten eligibility requirements and cut services. A portion of his proposed cuts would require federal waivers that Democrats and HHS have said likely would not be granted. MaineCare is funded roughly two-thirds by the federal government and one third by the state.
The Legislature’s Appropriations Committee agreed unanimously on a compromise budget package last week that would address a $120 million shortfall in the current fiscal year DHHS budget. LePage has criticized the compromise budget.
Sebelius said the state could act on its own to reduce eligibility of adults for Medicaid coverage to 133 percent of the federal poverty level. For a family of three, that would be an income of $25,390 a year, down from the current $38,180 a year of gross income.
Snowe questioned Sebelius about what HHS could allow states to do under the restrictions of federal Medicaid law. She said states need help with meeting increased costs and limited resources.
“Many states, including mine, are wrestling with some major challenges,” she said.
Snowe said an amendment she co-authored that was part of the Affordable Care Act was designed to give some flexibility to HHS to help states deal with funding Medicaid when the state was facing reduced revenues.
“States are grappling with deficits and that was what our amendment was all about, to give them the flexibility in the event of a budget deficit and that is the Maine circumstance,“ Snowe said.
Sebelius said she committed to LePage to help the state not only find immediate short-term savings that could be achieved administratively, but to help in developing ways to reduce costs in those programs where HHS has little flexibility in granting waivers.
“We’re doing that with states across the country,” she said.
Gov. LePage declined an interview request to discuss his recent conversation with Sebelius and whether the state will take her up on the offer of help in drafting waiver requests. Attempts to reach Maine DHHS Commissioner Mary Mayhew on Wednesday were unsuccessful.
Senate President Kevin Raye, R-Perry, said he was pleased Sen. Snowe took the opportunity to push the issue at the committee hearing. He said all the states need flexibility in dealing with the growing costs of the Medicaid system.
“I think that it is a positive sign to hear that a key administration official is now suggesting publicly that the administration will work cooperatively with the state to reduce the explosive growth in the MaineCare program,” he said.
Raye said it is clear the state needs to make significant changes in the program and that many of those changes can only be accomplished with federal approval.
House Minority Leader Emily Cain, D-Orono, said HHS has made it clear to the state in other communications that there are limits to what the state can do without a federal waiver. She was pleased to hear Sebelius had again made that point at a hearing of the Senate Finance Committee, the panel that has jurisdiction over Medicaid.
“I think it is great when the federal government, the Obama administration, tries to help states who are trying to navigate a complex environment, particularly the Affordable Health Care Act,” she said.
Cain said it is important that LePage share with the Legislature what Sebelius listed as policy changes the state can make without a federal waiver, and which ones will require federal approval. She said that information will be “very helpful” as lawmakers seek to develop a fiscal year 2013 Medicaid budget bill.
“We don’t want to waste our time working on ideas that can’t be implemented,” she said.
Cain said Democrats are opposed to any proposals that would “throw people off MaineCare” but will support efforts to make the programs more efficient and effective.
Lawmakers do not plan to start working on the 2013 Medicaid budget changes until the 2012 bill is enacted.