Lawmakers can’t agree on plan to pay Maine’s $480 million debt to hospitals

Posted May 02, 2013, at 12:19 p.m.
Last modified May 03, 2013, at 8:51 a.m.

AUGUSTA, Maine — Legislative party leaders exchanged partisan jabs again Tuesday, extending the debate over how and when the state should pay off its more than $480 million debt owed to 39 hospitals across Maine.

Adding a new wrinkle in the debate was new information from the federal Department of Health and Human Services that suggests 70,000 more people could be added to the state’s Medicaid rolls and that cost would be largely picked up by Washington, according to Democratic leaders at the State House.

Meanwhile, lawmakers on the Legislature’s Veterans and Legal Affairs Committee continued with their work on the new liquor contract terms but decided to hold off on any work on what the state would do with that revenue until at least next week.

In April, Democratic leaders said they would go along with Gov. Paul LePage’s plan to finance the debt repayment with revenue from a soon-to-be renegotiated contract for the state’s wholesale liquor business if LePage agreed to expand the numbers eligible for Medicaid in Maine.

But LePage balked at the idea and even charged Democrats with reneging on an earlier promise to pay the hospitals. Saturday he called on all Mainers to ask Democrats to pay the hospitals.

“Today is a good day for the state of Maine,” House Speaker Mark Eves, D-Berwick, told reporters during a news conference. Eves said letters from the federal government indicate it would cover 100 percent of the costs for newly eligible Medicaid participants in Maine.

Eves called the information “a game changer.” But Republicans, including LePage, say there’s no guarantee for how long the federal government will be obligated to meet those promises. LePage has tried to get the federal government to guarantee it will cover the expansion costs for at least 10 years.

Getting more people covered under the federal and state health care program addresses what Democrats consider one of the bigger “cost drivers” in health care — mainly the category of “charity care,” or the care that hospitals are required to provide but are often not paid for either by private insurance or public programs.

Many who receive charity care are ineligible for Medicaid but are too poor or are unemployed and cannot purchase private insurance. They may also be ineligible for MaineCare, the state’s Medicaid program, because they are single adults without children.

Republicans said they were willing to hold serious discussions about expanding Medicaid in Maine but they didn’t want to link the state’s obligation to pay its debt to hospitals to an expansion of a program the state could ultimately be left holding the tab for.

They urged Democrats to de-link the hospital debt repayment plan from the discussion about a Medicaid expansion.

Sen. Roger Katz, R-Augusta, the Senate’s assistant minority leader, said the issue of Medicaid expansion is “extremely complicated” and one that should be a singular debate for state Legislatures.

“Republicans are open to discussions and the governor has indicated he is open to discussions, but that is going to take months,” Katz said. “Because we don’t even know what deal we have or don’t have from the federal government.”

He said entering too quickly into an agreement with the federal government to expand Maine’s Medicaid rolls eliminates any negotiating leverage LePage may have on the topic. He said LePage was trying to get the best financial deal for Maine under the circumstances.

“The timelines are just all out of whack here,” Katz said. “We’ve got to have that conversation in a thoughtful way over a period of months.”

Other Republicans noted LePage presented his plan to pay back the hospital debt more than four months ago and Democrats have put up roadblock after roadblock.

They also note that the amount of matching funds paid by the federal government on that debt diminish over time so the longer the state waits to settle with the hospitals, the less it will receive from the federal government.

LePage has used a number of tactics to get Democrats to approve his plan. Earlier this year, he threatened to veto every bill that came across his desk until a payback plan was passed by the Legislature. He has also said he would release voter-approved general obligation bonds for public works projects statewide only after lawmakers reach a deal to pay the hospitals.

Republicans say combining the payback to the hospitals and the bonds, which would pay for everything from road to bridge repair to economic development projects around Maine, could pump more than $700 million into the state’s economy.

Democrats protested loudly when LePage suggested he would release the bonds once a hospital repayment plan was approved. They said the two items were unrelated and charged LePage with playing “Washington-style politics.”

Republicans on Tuesday were accusing their Democratic colleagues of the same thing. They also said time in the legislative session was growing too short to be adding such a complicated discussion into what already promises to be a hard-fought state budget debate.

“We are very concerned that the Democrats are moving the goal posts on us again,” Senate Minority Leader Michael Thibodeau, R-Winterport, said. “Now it seems as though they want to link Medicaid expansion to this important issue of paying Maine hospitals. These are both important issues but they ought to both be considered on their own merits.”

But Democratic leaders insisted Tuesday the two issues were inextricably linked and settling the hospital debt without addressing the long-term implications of unfunded health care in the form of charity care would be completing only “half of the job.”

“These things have everything to do with one another,” Eves said. “As we pay back this final debt payment to the hospitals, we have to make sure we are addressing the cost of health care.”

Eves said hospitals have told the Legislature, “year after year after year that charity care is a major cost-driver in the cost of doing business.

“We, by accepting these federal dollars, will really do something substantial to ensure the costs are not shifted,” Eves said.

He said an expanded Medicaid program in Maine would add about $250 million to the state’s health care economy and that would have a positive effect on the overall economy.

Democrats rejected the idea that de-linking the topics may be less controversial from a political standpoint.

“There are many things that we could do to help things along,” said Senate President Justin Alfond, D-Portland. “We are all in the business of trying to get things done for the state of Maine in a comprehensive way. We also understand that negotiations are always happening and we need to keep communicating with our Republican colleagues around what are the things that Democrats want and what are the things that Maine people want. And what they want is lower health care costs.”

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