Last spring, as lawmakers worked on assembling a new, two-year state budget, Health and Human Services Commissioner Mary Mayhew argued that Maine’s Medicaid program needed extra funds — more than the Legislature would allocate if it kept to its baseline — simply to keep pace with expected costs.
The idea was to prevent what has basically become a tradition in the Maine State House, and in capitals across the country: Regular requests from the Department of Health and Human Services for additional Medicaid funding to address seemingly inevitable shortfalls.
Lawmakers were initially resistant to go along with the increased funding request, especially as part of a budget in which Gov. Paul LePage’s administration proposed other social service cuts. But ultimately they did.
The result? Some $227 million in additional state Medicaid funds proposed by an administration that has attempted — and in some cases succeeded — to slash enrollment in the health care program and has resisted its expansion under the Affordable Care Act.
Coupled with matching funds from the federal government, which covers 61.55 percent of most of Maine’s Medicaid costs, $227 million became $594 million over the two-year budget cycle.
Yet now it’s apparent lawmakers and the LePage administration fell short in their attempt to prevent the need for a supplemental budget to patch holes in the state’s Medicaid program. As a new legislative session gets underway in Augusta, lawmakers are facing a $108 million Medicaid-related budget hole. (With federal funds figured in, the total amount would be $280.9 million.)
In May 2013, Mayhew told the BDN the LePage administration has made it a priority to improve state government’s forecasting of Medicaid’s costs. A new Medicaid claims system and a newly formed data analytics unit in the health and human services agency were supposed to help.
“We’re trying to build this stable financial foundation for this program and to acknowledge its true costs,” Mayhew said at the time.
The request for $227 million was part of the effort to acknowledge and plan for Medicaid’s true costs.
The LePage administration hasn’t released enough information to lawmakers or the public to show what exactly is creating the budget hole. Summary documents released Tuesday attributed part of the hole to savings initiatives in Medicaid that hadn’t fully panned out. Greater-than-predicted use of medical services by Medicaid recipients was the larger reason, according to the preliminary explanation supplied by the administration. The federal government’s withdrawal of funding for Riverview Psychiatric Center in Augusta is also to blame.
To be sure, the Medicaid budget hole isn’t the only budget challenge lawmakers must address this winter. They need to find the funds for an improved mental health services unit they approved for the Maine State Prison, an outgrowth of the Riverview situation. And the LePage administration — without actually proposing a supplemental budget — is requesting funds for some of the education initiatives it proposed as part of last year’s budget process that legislators didn’t fund.
Then, there are the budget challenges lawmakers have created on their own. A task force that was supposed to come up with $40 million in revenue by scaling back or eliminating some tax breaks and exemptions didn’t exactly develop a firm list of recommendations. Now, it’s not exactly clear how lawmakers will come up with $40 million without dipping into revenue sharing funds for municipalities, a budget category that has already sustained major cuts.
There’s also a budget-balancing provision that required LePage’s Office of Policy and Management to recommend $34 million in state government cuts. That office developed a proposal for $35.5 million in cuts, but the Legislature’s majority Democrats have so far objected.
The Legislature is potentially facing a $193 million budget gulf. That’s sure to complicate simplistic election year posturing and force lawmakers to make difficult choices.