State analyst: Medicaid compromise would insure 70,000, for practically no cost

Posted Feb. 27, 2014, at 6:39 p.m.
Last modified Feb. 28, 2014, at 5:59 a.m.

AUGUSTA, Maine — A plan to expand Medicaid coverage to more than 70,000 low-income Mainers for three years would cost the state practically nothing, according to the Legislature’s nonpartisan budget office.

Christopher Nolan, an analyst from the Office of Fiscal and Program Review, gave a preliminary cost-savings analysis to the Legislature’s Health and Human Services Committee on Thursday. In the three years for which the expansion would take place, the program would cost the state just $683,520, according to Nolan’s calculations.

That’s a drop in the bucket of the state’s general fund, which in the current biennium is about $6 billion.

The plan, proposed this week by two Republican lawmakers, expands Medicaid — known here as MaineCare — for three years to Mainers who make less than 138 percent of the federal poverty limit and takes steps toward implementing managed care, a system by which the state essentially turns over the MaineCare program to organizations that would be responsible for providing care to the entire covered population.

The plan would save the state $3,434,799 in the first year, Nolan said. It would cost just under $290,000 in the second year and $3.8 million in the third year. After that, the expansion would end, unless the Legislature decided to continue it.

Under the terms of the Affordable Care Act, the federal government will pay the full cost of expansion for three calendar years, 2014 through 2016. After that, it would slowly ratchet down its share to about 90 percent.

If the Legislature decided to continue covering the expanded population, it would cost the state $1.9 million in the fourth year of extension, according to Nolan’s report.

The Health and Human Services Committee took no action on the plan from Sens. Roger Katz, R-Augusta, and Tom Saviello, R-Wilton, and will take up the measure again at its next meeting on March 3.

Gov. Paul LePage and many other Republicans in Augusta staunchly oppose expanding Medicaid coverage. Members of the governor’s cabinet have made the rounds this week warning that increased Medicaid spending is “cannibalizing” their departments.

Follow Mario Moretto on Twitter at @riocarmine.

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