LePage wants more funding, flexibility before expanding Medicaid

Gov. Paul LePage comments on the Legislature's delay in approving his plan to repay Maine hospitals millions of dollars in back debt on Wednesday, March 6, 2013, at the Blaine House in Augusta.
Christopher Cousins | BDN
Gov. Paul LePage comments on the Legislature's delay in approving his plan to repay Maine hospitals millions of dollars in back debt on Wednesday, March 6, 2013, at the Blaine House in Augusta. Buy Photo
By Matthew Stone, BDN Staff
Posted March 20, 2013, at 1:32 p.m.

AUGUSTA, Maine — Gov. Paul LePage’s administration is seeking additional federal funds and Medicaid flexibility as a condition for Maine to participate in an expansion of the state’s Medicaid program under the federal Affordable Care Act.

In a letter sent Monday to U.S. Health and Human Services Secretary Kathleen Sebelius, Maine Health and Human Services Commissioner Mary Mayhew asked the federal government to cover 100 percent of expansion costs for a decade and requested additional flexibility in the way Maine operates its Medicaid program.

Meanwhile, a Democratic representative from Gorham on Wednesday introduced legislation that would sign Maine up to accept the federal Medicaid expansion funds. Rep. Linda Sanborn, who was joined at a news conference by other Democratic legislators and doctors from the Maine Medical Association and the Maine Osteopathic Association, said the move would save Maine money in the long run while providing more residents with health insurance.

Mayhew’s letter came a week after the LePage administration and federal officials began talks about a potential expansion of Maine’s Medicaid program. LePage, a staunch opponent of the Affordable Care Act, had remained opposed to the expansion but began conversations with officials at the U.S. Department of Health and Human Services after eight other Republican governors endorsed Medicaid expansions in their states despite their opposition to the federal health care law.

Under the health care law, the federal government covers 100 percent of Medicaid expansion costs for newly eligible residents for three years. After that, the federal share gradually drops to 90 percent in 2020 and the states pick up the remaining share. Maine is asking the federal government to cover 100 percent of costs for 10, rather than three, years.

Maine is one of a handful of states that the federal government considers an “expansion state” because it broadened its Medicaid program more than a decade ago to cover many of the residents — including parents and adults without children — who would be newly eligible for Medicaid in most states under the health care law.

Mayhew told Sebelius this situation puts Maine at a disadvantage compared to other states.

“The issue has always been that because Maine is penalized under the ACA in the category of, ‘No good deed goes unpunished,’” Mayhew told the Bangor Daily News on Wednesday. “We simply do not receive the same level of federal support that other states that did not expand will receive.”

While fewer Maine residents would qualify for 100 percent federal Medicaid funding, the federal government is promising to increase its share of costs for states like Maine that have already expanded Medicaid.

That means the state would receive more federal funds to provide Medicaid coverage for some people it’s already covering. The increased federal share would rise to 93 percent of costs in 2019 before settling at 90 percent in 2020, according to the federal Centers for Medicare and Medicaid Services. The federal government currently covers 62.57 percent of Maine’s Medicaid costs, a rate that has dropped from a high of 74.86 percent in 2010.

But Mayhew maintained Wednesday that Maine would be penalized for expanding early because the federal government wouldn’t be covering 100 percent of expansion costs in Maine during the first three years while it’s covering 100 percent of similar costs in other states.

“Those are significant concerns. As we seek to create financial stability for the state’s Medicaid program, it is imperative that we receive greater federal support over a longer period of time.”

A recent analysis from the Kaiser Family Foundation projects Maine — because it expanded Medicaid early — would be one of 10 states to have the amount of state funds it spends on Medicaid actually drop over the next decade — by $570 million, or 3.8 percent — while the federal share of Medicaid expenses would rise by $3.1 billion, or 11.4 percent.

Maine’s Medicaid rolls will grow by 55,000 people during the next decade if the state expands the insurance program, according to the Kaiser report. Even if Maine doesn’t expand, the analysis predicts 10,000 more people who may currently be eligible but unenrolled will join the rolls. Part of that could be the result of the Affordable Care Act’s individual mandate, which requires everyone obtain insurance coverage.

Sanborn on Wednesday said there’s no harm in asking the federal government to fund a greater portion of Medicaid expansion costs as long as a negative answer from federal officials isn’t the reason for Maine to turn down the expansion.

As for flexibility, Mayhew said federal Medicaid policies don’t allow some of the reforms Maine’s Medicaid program has started to embrace, including an emphasis on payments to health-care providers for positive outcomes rather than procedures and increased support for cheaper in-home and community medical services rather than more expensive residential facilities.

The state recently won a $33 million federal grant that will help it test some of those cost-saving initiatives.

“Frankly, even where it is permissible, it is incredibly bureaucratic and administratively burdensome” to change state Medicaid policies, Mayhew said. “We know that health care delivery is changing rapidly and Medicaid’s policies need to keep pace.”

In her letter, Mayhew asked for a “global waiver” that allows Maine flexibility to change the way it runs its Medicaid program.

A spokesman for Sebelius, the federal health and human services secretary, said Wednesday that federal Medicaid officials have offered states flexibility to help them restructure the way they pay for Medicaid services and by providing funding to encourage lower-cost at-home health care.

Maine began its Medicaid discussions with federal officials weeks after Arkansas Gov. Mike Beebe, a conservative Democrat, struck a deal that will allow his state to use Medicaid expansion funds to expand private insurance available to low-income residents through his state’s health insurance exchange.

Asked if Maine is seeking a similar arrangement, Mayhew said all options are on the table.

“It will be important for Maine to have the benefit of understanding what different arrangements have been established in these other states that could be attractive and beneficial to Maine,” she said.

http://bangordailynews.com/2013/03/20/politics/lepage-wants-more-funding-flexibility-before-expanding-medicaid/ printed on July 23, 2014