Maine Hospital Association supports Medicaid expansion

Posted March 27, 2013, at 3:01 p.m.
Last modified March 27, 2013, at 3:40 p.m.

AUGUSTA, Maine — The group that represents Maine’s 39 hospitals has come out in support of expanding Medicaid in the state, a move that could provide insurance coverage for about 55,000 low-income Maine residents over the next decade.

The Maine Hospital Association joins two organizations representing doctors, the Maine Medical Association and the Maine Osteopathic Association, in supporting an expansion as Gov. Paul LePage’s administration weighs whether to accept funding available under the federal Affordable Care Act to grow Maine’s Medicaid program.

Jeffrey Austin, the hospital association’s vice president of government affairs and communications, confirmed his group’s support for the expansion in a statement emailed to reporters Wednesday afternoon.

Austin told the Bangor Daily News last month that the group was seeking more details on the expansion’s financial impact to the state along with assurances that the state wouldn’t continue cutting hospital reimbursement rates to fill budget holes before taking a position.

The association has been at the center of a high-profile debate in recent months surrounding efforts by LePage to pay back the state’s $484 million debt to its hospitals using proceeds from a renegotiated state wholesale liquor contract.

“Based upon the best information we have available, we are presuming that Medicaid expansion will not cost the state too much money,” Austin wrote in his statement. “Our best information at this time is that for most individuals (but not all) the federal reimbursement will be at the 100 percent FMAP rate for three years and then declining to 90 percent by 2019. We still look forward to the state providing the exact fiscal impact.”

The Maine Hospital Association’s support for the expansion comes as LePage, who has long opposed expanding Medicaid, discusses a potential expansion with federal officials. Maine Health and Human Services Commissioner Mary Mayhew last week requested that the federal government cover 100 percent of Maine’s expansion costs for a decade — rather than the three years prescribed in federal law — as a condition for Maine to participate in the expansion.

“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,” Mayhew wrote in a letter to U.S. Health and Human Services Secretary Kathleen Sebelius.

Mayhew is the former vice president of the Maine Hospital Association.

Under the federal health care law, if states choose to expand their Medicaid programs, the federal government will cover 100 percent of costs for newly eligible Medicaid recipients for three years. The 100 percent funding will gradually drop to 90 percent in 2020 and states will have to make up the remaining share.

Maine, however, expanded its Medicaid program about a decade ago to many of the people who would otherwise be eligible for the first time under the Affordable Care Act. That means fewer residents in Maine would qualify for 100 percent federal funding. But 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.

A recent Kaiser Family Foundation analysis projects that Maine would be one of 10 states to see 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.

The Kaiser analysis also projects Maine’s hospitals would see $348 million more in payments from Medicaid over the next decade if the state expanded the program. Hospitals would also have to provide less care for which they aren’t paid, according to the analysis.

While the Maine Hospital Association supports the state expanding its Medicaid program, Austin said that support isn’t unconditional.

“While MHA supports expansion of this state program, the proposed biennial budget proposes to cut hospitals’ reimbursements under this program by close to $50 million per year,” Austin wrote in his statement. “If there are any significant state costs associated with expansion, hospitals need to see a credible plan to address both the expansion and the underlying cuts to hospitals.”

Democratic legislative leaders said Wednesday they welcome the hospital association’s support for Medicaid expansion. House Speaker Mark Eves, D-North Berwick, and Senate President Justin Alfond, D-Portland, have signed on as co-sponsors to a bill, LD 1066, that would sign Maine up to participate in the Medicaid expansion. A hearing on that bill, sponsored by Rep. Linda Sanborn, D-Gorham, is scheduled for April 2.

“People are really looking at the facts and thinking this is an opportunity we can’t miss,” said Eves. “I think the hospital association has done their work and looked at this and said, ‘This is a good deal for the state of Maine.’”

Adrienne Bennett, a spokeswoman for LePage, declined to comment specifically on the Maine Hospital Association’s stance on Medicaid expansion.

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