AUGUSTA, Maine — Republicans and Gov. Paul LePage have drawn attention to a drafting error in the federal Affordable Care Act in recent days as they resist attempts by Democratic legislative leaders to tie an expansion of Maine’s Medicaid program to one of LePage ’s top priorities: repayment of the state’s $484 million debt to its hospitals.
The information has Maine’s House Republican leader, Rep. Kenneth Fredette of Newport, suggesting that a specially formed study group should spend the summer and fall examining the state’s options for expanding Medicaid. The extra time would take pressure off the Legislature to reach an accord on the contentious issue in the final weeks of its session, he said.
Democratic House Speaker Mark Eves, however, says the suggestion is the latest tactic by Republicans to hold up an expansion of Medicaid coverage for low-income people under the federal Affordable Care Act, which would take effect Jan. 1, 2014.
At issue is an error in the text of the Affordable Care Act that would qualify about 48,000 low-income parents and adults without children for federal help to purchase private health insurance if Maine opts not to expand Medicaid. Those 48,000 residents would otherwise be eligible for Medicaid if the state expands its low-income health insurance program.
If not for the drafting error, those 48,000 residents would be eligible only for Medicaid.
If Maine opts against the expansion, however, neither the federal subsidy help nor Medicaid coverage would be available to about 28,000 adults without children who earn less than 100 percent of the federal poverty level — less than $11,490 for a one-person household.
“There may be legitimate arguments in there for maybe having that portion be covered by Medicaid expansion and the other population be covered by insurance subsidies,” said Fredette. “It shows the complexities of the issue, why it needs to be done over the long term so we get it right and so that we don’t expose Maine taxpayers to these ongoing [Medicaid funding] crises that we have.”
The Affordable Care Act was designed to extend health insurance coverage to nearly all Americans through a major expansion of Medicaid and through federal subsidies designed to help others purchase private insurance through insurance exchanges.
The law was designed to make Medicaid available to those earning up to 133 percent of the poverty level — $15,282 for a one-person household — and federal tax subsidies available to those earning between 133 percent and 400 percent of the poverty level.
The drafting error, however, makes the subsidies available to those earning between 100 percent of the poverty level and 400 percent, rather than starting at 133 percent. About 6 million people nationwide fall in that overlap category — between 100 percent and 133 percent of the poverty level. The health care law’s drafters are considering the drafting error a “happy coincidence” because it could make insurance coverage available to more people even if about half the states opt out of the Medicaid expansion, according to a February article in Governing Magazine.
LePage highlighted the drafting error in his weekly radio message on Saturday. “If more Mainers in 2014 will get tax subsidies to become insured, why is Democratic leadership holding up the hospital bill?” LePage said. “It’s simple. They do not want to pay the hospitals.”
But Eves, the Democratic House speaker, said the argument about subsidies “is just another excuse” for LePage and Republicans to resist expanding Medicaid.
“A couple weeks ago, it was ‘We’re in a death spiral because of Obamacare.’ Then it’s this about, ‘As long as we have exchanges, we’re going to be OK,’” Eves said. “Which one is it, governor?”
It’s unlikely the low-income residents who would qualify for federal subsidies if Maine doesn’t expand Medicaid could afford the co-pays and deductibles built into the insurance plans available on the individual and small-group markets, Eves said.
“It’s just another excuse in a long line of excuses of delaying and denying health coverage for tens of thousands of Mainers,” he said.
Democratic lawmakers and LePage have been debating for months whether Maine should expand Medicaid coverage under the federal health care reform law. While LePage has generally opposed the expansion, his administration started discussing Medicaid expansion options with federal officials about two months ago after a number of other Republican governors indicated their states would expand Medicaid.
Under the health care law, 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. In Maine, about 50,000 adults without children who earn up to 133 percent of the federal poverty level — $15,282 for a one-person household — would become eligible for Medicaid if the state expands coverage.
If Maine expands Medicaid, it’s likely that another 10,500 childless adults who already receive Medicaid due to a past Medicaid expansion would also qualify for 100 percent federal funding for three years. If Maine doesn’t expand the low-income insurance program, those adults, along with about 15,000 low-income parents, will lose Medicaid coverage on Jan. 1, 2014.
“We know that we need to take advantage of accepting these federal dollars,” Eves said. “If we don’t, and we go with what the governor is suggesting, tens of thousands of Mainers will be without health insurance when they would have gotten coverage from the federal government.”
The federal government hasn’t approved a Medicaid expansion plan that would allow states to partially expand Medicaid and make subsidies available to other low-income residents, as Fredette is suggesting. Federal officials, however, are getting closer to approving an alternative Medicaid expansion model — spearheaded by Arkansas — that would allow states to use federal Medicaid funds to help low-income residents buy private insurance.
John Martins, a spokesman for the Maine Department of Health and Human Services, said state officials are considering the option of subsidies for low-income residents as they weigh whether the state participates in the Medicaid expansion, which starts Jan. 1, 2014.
“What is important to note is if Maine chooses not to expand, a significant number of people will be eligible for federal subsidies to help purchase private health insurance,” he wrote in an email.