AUGUSTA, Maine — Deep cuts to Maine’s social services are set to take effect in just a few weeks, including some that hinge on an imminent U.S. Supreme Court decision over the fate of the nation’s landmark health reform law.
The budget for the Department of Health and Human Services calls for rollbacks in general assistance aid and cuts to Medicaid support for group homes as of July 1. By the end of August, the state will pull back on funds for Head Start, children’s behavioral health and the Fund for a Healthy Maine, which supports programs that help residents quit smoking and pays for child care, home health visits, dental care and family planning.
Come early October, thousands of Mainers are slated to lose coverage under MaineCare, the state’s Medicaid program, through controversial cuts that have fiercely divided lawmakers this year. Opponents, including many Democrats, hold out hope that the federal government will prevent some cuts that violate President Barack Obama’s national health reform law. Meanwhile, many Republican lawmakers and others who see the cuts as essential to reining in MaineCare spending are rooting for the health reform law’s demise in coming days.
The U.S. Supreme Court is expected to rule as soon as this week on the constitutionality of the Patient Protection and Affordable Care Act, which, among many other reforms, calls for an expansion of Medicaid coverage to millions of low-income Americans.
The court could uphold the law, strike it down, or rule on only parts of it, including the Medicaid expansion and a mandate that Americans buy health insurance or face a penalty.
Maine is one of 26 states challenging the so-called “individual mandate.”
Maine plans to save $20 million in its Medicaid program through tighter eligibility requirements in programs that help elderly and disabled people to afford insurance and prescription drugs, as well as stricter income limits for some parents and dropping 19- and 20-year-olds from the rolls.
Those cuts, which affect about 23,000 people, violate a provision of the federal law that prevents states from slashing certain Medicaid services.
Gov. Paul LePage and DHHS Commissioner Mary Mayhew have previously expressed confidence that the feds would grant Maine an exception to the provision, provided lawmakers approved the cuts first.
But if the Supreme Court justices strike down the Affordable Care Act in its entirety or just the Medicaid expansion, Maine won’t need a waiver and the cuts will take effect this fall.
DHHS will hold off on setting the stage for the waiver until after the ruling, said Stefanie Nadeau, director of MaineCare Services.
“Once the ruling comes in and we analyze what, if any or all, is maintained, then we will take action as appropriate to make sure that we comply with the rules and regulations of the ACA,” she said.
Maine has not yet requested a waiver from the federal government.
Several states have already applied for a waiver, but the U.S. Department of Health and Human Services hasn’t yet granted one. Some Maine lawmakers are skeptical that the feds would approve a waiver request.
As the result of another DHHS cut, an estimated 19,000 childless adults on MaineCare will learn in October whether they will keep their benefits. Lawmakers preserved coverage for childless adults in February through a compromise budget bill, but capped funding for the program at $40 million and froze enrollment. DHHS is sorting out whether the enrollment freeze will be enough to meet the spending cap. If not, DHHS officials must submit a plan in October to adjust benefits.
Cuts that limit Medicaid reimbursement for methadone and suboxone treatment to two years, unless deemed medically necessary, will kick in next year.
The MaineCare cuts were passed as a way to close a $200 million shortfall at DHHS over this fiscal year, which ends June 30, and the 2013 fiscal year.
On Monday, DHHS Commissioner Mary Mayhew told the Legislature’s budget committee that the department is facing an estimated $12.5 million shortfall as the fiscal year winds to a close. The red ink means health care providers who take MaineCare patients won’t get paid on time this month.
The shortfall resulted from higher than anticipated costs for prescription drug benefits, reimbursements for school-based health services and payments for residents who receive both Medicare and Medicaid, Nadeau said.
DHHS is exploring shifting revenues from other areas to minimize the impact on providers, she said.
It’s not unusual for MaineCare to delay payments to providers, especially at the end of the fiscal year, but the department is working to more tightly manage cash flow, Nadeau said.
“I wouldn’t say that this is cause for immediate concern or alarm … With an entitlement program, it is very difficult to accurately predict what every weekly cycle is going to be because there are highs and lows,” she said.
DHHS also is recovering $16 million that was overpaid to health care providers over the last year. The overpayments resulted from an error within the Medicaid claims payment system. About $7 million has been recovered so far, Nadeau said.
The overpayments are not related to another computer error that led thousands of MaineCare recipients to continue receiving coverage after they should have lost eligibility for the program, she said.
Maine is one of many states struggling to get a handle on Medicaid spending as the federal government mandates wider coverage under Obama’s health reform law.
The Supreme Court is expected to issue its hotly anticipated ruling on the law by the end of June.