Last week, Gov. Paul LePage presented his plan to deeply cut MaineCare, Maine’s Medicaid program, by removing nearly 65,000 of our state’s most needy citizens and also slashing current MaineCare beneficiaries’ benefits. LePage believes these changes are necessary to balance Maine’s budget, as his proposal will produce short-term savings.
Unfortunately, a more nuanced analysis of these proposed cuts suggest that the proposal is both economically and socially misguided.
First, the logic that Maine will save money by cutting MaineCare is fundamentally flawed. When Maine supports its citizens’ health needs by contributing to MaineCare, the federal government provides significant matching funds. According to the Kaiser Family Foundation, for every dollar Maine spends on MaineCare in 2012, the federal government will give Maine $1.72. Funding MaineCare therefore multiplies each dollar Maine spends and helps to bring additional money into the state’s economy to support the hospitals, doctors, nurses and other health care professionals who provide needed care.
LePage’s current proposal seeks to cut approximately $188 million from MaineCare over the next two years, which means Maine will lose nearly $323 million in funding from the federal government. The health care sector has been Maine’s largest source of job growth and this large loss of revenue will negatively affect Maine’s economic recovery by slowing hiring.
Aside from its negative impact on job growth, it is unclear if the proposed cuts will actually save our state money. Although removing 65,000 beneficiaries from MaineCare will immediately decrease MaineCare expenditures, these 65,000 people will still need medical care. As these uninsured citizens put off needed medical care because they lack MaineCare, they will ultimately seek higher-cost care in emergency room settings and will be unable to pay their expensive hospital bills.
Because our state’s health care centers cannot absorb unlimited charity care, the costs of this uncompensated care may ultimately be shifted onto other Mainers in the form of increased health insurance premiums.
Economically, it is therefore unclear if these proposed MaineCare cuts will ultimately save money, as the cuts will decrease potential tax revenue due to decreased job growth and may also lead to higher health care costs across the state.
Aside from the negative economic effects, the proposal’s biggest flaw is that it seeks to balance Maine’s budget shortfalls exclusively on our state’s poorest and most vulnerable citizens. MaineCare beneficiaries include elderly people who live in nursing homes, children from low-income families and many adults who are struggling to find jobs during these very difficult economic times.
Instead of considering a mix of minor tax increases and budget cuts to balance our state’s budget, LePage’s proposal only seeks to take away these beneficiaries’ access to health care. If LePage is serious about balancing the state budget, he should consider one key fact: most decent people would rather pay slightly higher taxes than to witness their less fortunate friends, family, neighbors and community members decide between buying food and attending a needed doctor’s office visit. For many MaineCare beneficiaries, such decisions are daily realities and eliminating these beneficiaries’ medical benefits will only make these problems worse.
LePage has crafted a proposal that targets our states’ most vulnerable and at-risk populations because he knows that many MaineCare beneficiaries lack the voice and political power needed to oppose these looming cuts. Whether you believe LePage’s proposed cuts are economically misguided or morally objectionable, it is essential to ensure that this sorely misguided policy does not become law. Partner with your less fortunate community members who may lose their health care access and openly oppose this proposal.
Kyle Dempsey grew up in East Millinocket and is currently a first-year student at Harvard Medical School. He is a George Mitchell and Harry S. Truman Scholar. He can be reached at Kyle_Dempsey@hms.harvard.edu.