MaineCare cuts could lead to lawsuit, health advocates say

LEWISTON, Maine — Disagreement about what a recent U.S. Supreme Court ruling, which upheld key provisions of the federal Patient Protection and Affordable Care Act, means for Maine could end up in federal court.

Ana Hicks, a senior policy adviser with the advocacy group Maine Equal Justice Partners, said Wednesday her organization could be among those that sue the state government if it proceeds with reductions in Medicaid programs. The cuts are part of a budget-balancing bill passed by lawmakers earlier this year.

Hicks’ organization, which has sued the state in the past when it believed Maine was not meeting requirements of federal law, is waiting to see whether Gov. Paul LePage’s administration proceeds with Medicaid cuts, which Equal Justice Partners says are illegal.

Hicks said she was waiting for direction from the U.S. Department of Health and Human Services on what states should do. She hopes Maine will wait for that guidance before implementing reductions.

In question is whether the state needs to apply for a federal waiver to make the changes, or whether the state can simply make amendments to its existing Medicaid plan and move forward with the reductions.

At stake are state programs, including MaineCare, the state’s Medicaid program, which covers about 24,000 income-eligible 19- and 20-year-olds. Dropping that coverage would save the state about $4 million.

Other changes in the budget would cut eligibility for the state’s Medicare Savings Plan and Drugs for the Elderly and Disabled Program. About 1,825 people would lose the Medicare benefits; 260 would lose the drug program benefits. The state would save about $3 million a year with these changes.

“We would hope they would not move forward,” Hicks said. “But if they do, we would then look at what our options would be to protect those people.”

Hicks said additional “guidance” to states from the federal government on implementing the law is expected soon.

Republican lawmakers who crafted the changes and passed them into law, largely without Democratic votes, have said state DHHS spending on health insurance programs for the poor is unsustainable and Maine can no longer afford such generous offerings.

Maine is one of 14 states in the nation to offer Medicaid coverage to 19- and 20-year-olds, and that inclusion has left others, including some with disabilities, on a waiting list for health care, Republicans argued.

LePage’s stance has been that the state must conserve and protect those services for the “most vulnerable” populations.

The governor and Maine Attorney General William Schneider have said the recent Supreme Court ruling allows the state to make the cuts and that Maine’s DHHS can simply amend its MaineCare plan to reflect the changes.

Their interpretation of the Supreme Court ruling is in direct conflict with that of Democratic lawmakers, Hicks and others who say the ruling affirms that states can’t be forced to expand Medicaid programs, but they cannot cut existing Medicaid programs, as lawmakers did this year.

As of Wednesday, the governor was sticking to his position.

“Maine believes the Supreme Court decision confirms that states have the flexibility to manage their Medicaid program without risking the loss of federal funds,” LePage spokeswoman Adrienne Bennett wrote in an email message.

“Instead of seeking a waiver, which is a complex process, we have begun to draft a State Plan Amendment in order to implement what was approved by the Legislature,” Bennett wrote. “A State Plan Amendment is required for any change in Medicaid services and is within the normal course of doing business within the Medicaid program.”

If the governor is wrong, the Legislature will face another $12 million DHHS budget shortfall, according to Democratic lawmakers from Lewiston.

Sen. Margaret Craven and Rep. Peggy Rotundo, Lewiston Democrats, said that party warned that the cuts, without a waiver permitting them from the federal government, would be in violation of new federal health care law.

“[These cuts] are illegal,” Craven said. “If the governor takes the savings that they booked without the waiver, the punishment for the state of Maine would be to lose all federal Medicaid funding. It would be my guess he is not going to go there and we will actually have the $12 million shortfall to make up. They shouldn’t have booked those things to begin with and we kept saying it’s a make-believe budget they were passing.”

Prior communications between state officials and U.S. Secretary of Health and Human Services Kathleen Sebelius indicate the state, were it to apply for a waiver to enact the cuts, would not be approved, Craven said.

“We are not going to be allowed to do this, and in which case, there will be a hole in the budget that we are going to have to come back to and deal with in January,” Rotundo said.

Hicks said most of the people being cut from the state’s MaineCare program were protected under the federal law, and the recent state budget cuts are in direct conflict with that.

The federal law prohibits states from reducing Medicaid eligibility for strictly budgetary purposes, Hicks said.

She said no other state had been granted a waiver from the federal government to reduce the number of people getting state- and federal-funded health care coverage.

Hicks pointed out that some provisions of the law do allow states to reduce services for those exceeding certain federal income eligibility guidelines, and that a portion of those losing coverage under the recently passed budget would not be protected under the federal law.

The Supreme Court ruling did not address the “maintenance of effort” provisions in the new federal law, Hicks said. That provision was a requirement that states keep intact their existing Medicaid programs or face losses in federal Medicaid revenue.