September 15, 2019
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Democrats: Poor planning by LePage administration contributed to DHHS budget gap

Seth Koenig | BDN
Seth Koenig | BDN
Gov. Paul LePage

AUGUSTA, Maine — Lawmakers dug into an exhaustive discussion about the Department of Health and Human Services budget Tuesday and emerged no closer to consensus on the origins and magnitude of a looming shortfall.

The Legislature’s Appropriations Committee attempted to gain a better grasp on the DHHS budget ahead of a series of public hearings this week that are expected to pack the State House. Gov. Paul LePage has proposed a sweeping overhaul of the MaineCare program that would axe coverage for 65,000 residents in an effort to bring Maine’s program in line with national averages.

Questions remain over the size of the budget gap, and Democrats seized on a new report that indicates much of the shortfall arose from budget miscalculations.

“We learned today that the budget hole was partially caused by poor planning and questionable assumptions from the administration,” Rep. John Martin, D-Eagle Lake, a veteran panel member, said in a press release. “We don’t have a problem of increased enrollment of MaineCare. Contrary to the governor’s rhetoric, what we have here is a realization of a failure to plan nearly a year into the governor’s tenure.”

Rising enrollment accounts for $6.5 million of the estimated $120 million shortfall, according to the report on the deficit, prepared by the administration for Tuesday’s hearing.

Enrollment in MaineCare, the state’s version of the federal Medicaid program, has risen about 2 percent this year to just more than 360,000, as of October. Over the last decade, enrollment has ballooned 80 percent, making MaineCare unsustainable when coupled with dwindling federal reimbursements, the governor has said.

DHHS Commissioner Mary Mayhew told lawmakers Tuesday she’s grown more confident in the department’s budget projections after close analysis in recent days.

“What I can say to you today is that my charge to this group has been to challenge every single assumption they’ve made, to look at every single number that they’ve identified, through every possible lens,” she said. “And it’s through that exhaustive process that my confidence has increased in this shortfall analysis.”

The department is facing a roughly $120 million budget gap in the 2012 fiscal year, a figure the nonpartisan Office of Fiscal and Program Review reported was in line with its analysis. But Chris Nolan, an analyst for the office, told the panel the gap could be smaller when federal matching funds are taken into account along with state general fund revenues.

“There does not appear to be the same magnitude of a shortfall,” he said.

DHHS also is projected to face a $101 million gap in the next fiscal year.

The department already is borrowing from third-quarter allocations to cover MaineCare expenses in the second quarter for the fiscal year ending next June, Nolan said.

“There appears to be the financial wherewithal to get to the end of the third quarter,” but the fourth quarter remains in question, he told lawmakers.

The deficit report also cited complications with a new claims processing system, which caused $30 million in overspending as claims from the last fiscal year rolled over into this budget year. Overall, faulty assumptions built into the DHHS budget, some a legacy from the previous administration, precipitated the deficit, the report stated.

LePage’s plan to address the budget hole includes eliminating MaineCare eligibility for childless adults, 19- and 20-year-olds and some parents. He also has proposed limiting dental, occupational and physical therapy, adult family care and other services as well as access to brand-name prescription drugs. MaineCare, including state and federal spending, represents a third of the total state budget.

The MaineCare overhaul is part of a supplemental budget proposal that lawmakers will evaluate when the Legislature convenes in January. Several audits of Medicaid-funded programs also are under way, with a draft report expected in January.

Three days of public hearings on the budget are slated to commence at the State House Wednesday.

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