Court ruling leaves deep MaineCare cuts in question

The U.S. Supreme Court’s decision to let states opt out of the federal health reform law’s sweeping expansion of Medicaid revived uncertainty Thursday over the LePage administration’s planned cuts to health coverage for poor Mainers.

MaineCare, the state’s Medicaid program, provides health insurance to low-income residents. President Barack Obama’s landmark health reform law expands Medicaid by using the program to cover 17 million Americans who earn less than 133 percent of the federal poverty line, or about $14,500 for an individual.

Under the Patient Protection and Affordable Care Act, states would get substantial additional federal dollars to help cover the costs of the expansion. States that didn’t extend Medicaid coverage to the poor risked losing all federal funding.

The justices ruled that the federal government cannot pull existing Medicaid funding from states that opt out of the law’s call to greatly expand the program. That frees states to skip the expansion — or even reduce some Medicaid services — without penalty.

What remains unclear is whether states can cut some Medicaid spending without federal permission, which Gov. Paul LePage proposed and the Legislature approved earlier this year.

Typically, states split the bill for Medicaid with the feds, but under the ACA, the federal government will pay for all new beneficiaries through 2016. The match starts to drop in 2017, settling at 90 percent after 2020, which may not be enough to entice some states to accept the financial burden of new patients.

In recent months, LePage and the Department of Health and Human Services have resisted the push to broaden Medicaid, instead dropping tens of thousands of people from the rolls in two rounds of state budget cuts.

LePage and DHHS Commissioner Mary Mayhew also have planned to seek an exception to a provision of the law that prevents states from slashing certain Medicaid services. Maine plans to save $20 million through tighter eligibility requirements in programs that help the elderly and people with disabilities afford insurance and prescription drugs, as well as stricter income limits for some parents and dropping 19- and 20-year-olds from the MaineCare rolls.

Those cuts would require a waiver from the federal government under the reform law’s “maintenance of effort” provision.

It remained unclear Thursday whether the court’s decision to give states more free rein with Medicaid will mean Maine can go through with the cuts without a waiver. If it can, the cuts would hit 23,000 people and keep the state budget in balance. Some Maine lawmakers are skeptical that the feds would approve a waiver request, putting the state’s balanced budget at risk.

Mayhew said in a statement that the court’s decision affirms states’ flexibility to manage their Medicaid programs and that DHHS still plans to seek a waiver.

“We will follow federal procedures and submit state plan amendments within the coming weeks that will outline the Medicaid reductions that were enacted by the Maine Legislature. Based on the Supreme Court’s decision, we anticipate that these amendments will be approved,” she said.

Several states have already applied for waivers, but the U.S. Department of Health and Human Services hasn’t yet granted one.

Judy Solomon, vice president for health policy at the left-leaning and Washington, D.C.-based Center on Budget and Policy Priorities, said U.S. HHS officials will have to weigh in on how the ruling might affect the waivers.

“I think we really don’t know,” she said.

The justices’ decision appeared to Solomon to affect only people who will be eligible for Medicaid in the future, not those who are eligible today and covered by the maintenance of effort provision. That would leave Maine still in need of a waiver to reduce its Medicaid rolls and hence, balance its budget.

Senate President Kevin Raye, R-Perry, who called the law “flawed and unworkable,” said he looked forward to learning how the ruling would affect the MaineCare waivers.

“I am eager to get clarification of one potentially encouraging aspect of the Court’s decision that may help us achieve needed MaineCare reforms by striking down ObamaCare’s troubling provision requiring states to spend more on Medicaid at a time when states are struggling with budget shortfalls,” he said in a statement.

Rep. Sharon Treat of Hallowell, the lead House Democrat on the Legislature’s Insurance and Financial Services Committee, said she hoped LePage would consider expanding health insurance coverage for low-income Mainers.

“Whether he will be open to expanding Medicaid, it’s hard to know,” she said. “To me, it seems incomprehensible that we would reject almost the entirety of funding for this expansion, and why? For some philosophical reason.”

BDN political reporter Matthew Stone contributed to this report.