AUGUSTA, Maine — The state will face an estimated $20 million budget shortfall if federal officials don’t sign off on plans to reduce state Medicaid spending. Lawmakers Friday pressed the state’s Medicaid director for answers on how the state Department of Health and Human Services will fill the potential budget gap if cuts to the state’s Medicaid program are rejected by the Centers for Medicare and Medicaid Services.
The state Medicaid cuts in question would affect 36,000 people by eliminating coverage for 19- and 20-year-olds, tightening income eligibility requirements for low-income parents and scaling back Medicaid access for elderly residents who also qualify for Medicare benefits.
A spokesman for the Centers for Medicare and Medicaid Services has said only a portion of those cuts — changing the income threshold at which residents qualify for MaineCare from 200 percent of the poverty level to 133 percent — are likely allowed under the Obama administration’s Affordable Care Act, which largely prohibits states from cutting Medicaid before a 2014 expansion of the program.
The state needs federal approval before it can implement any of the cuts, which lawmakers approved as part of two separate budget packages this year.
Republicans and Democrats on the Appropriations Committee quizzed MaineCare Services director Stefanie Nadeau on Friday on the size of the budget gap they might have to make up if parts of the state’s Medicaid request are approved and others aren’t.
“The federal government seems to have indicated they’re not in a rush to make a decision,” said Rep. Kenneth Fredette, R-Newport. “We’ve booked savings. If we were to get a denial in November or December, we would essentially have a shortfall for some of the savings that we booked.”
Nadeau said the Department of Health and Human Services expects its Medicaid cuts ultimately will be approved, but a contingency plan is “something that the department is looking at and working on currently.”
“This was one of the reasons — this irresponsible budgeting — one of the reasons the Democrats would not go along with the Republicans on this issue,” said Rep. David Webster, D-Freeport.
Democrats on the Legislature’s Appropriations Committee also asked pointed questions about why the LePage administration chose to take legal action against the federal government before it received an answer indicating whether it could make its proposed Medicaid cuts.
Nadeau appeared before the budget-writing appropriations panel Friday, three days after Attorney General William Schneider asked for a court review of the federal government’s decision not to rule on the state’s request to make about $20 million in cuts to its Medicaid program as quickly as the LePage administration had asked.
Schneider also asked the 1st Circuit Court of Appeals in Boston to order the federal government to approve Maine’s request to make its proposed Medicaid cuts and to pay Maine’s state share of related Medicaid expenses for the time federal officials take to consider the request.
“I wonder how right the state was to file a lawsuit prior to a violation of federal law,” said Rep. John Martin, D-Eagle Lake.
The LePage administration on Aug. 1 submitted a request to the Centers for Medicare and Medicaid Services to approve its Medicaid cuts. The administration requested an expedited ruling by Sept. 1 so it could implement the cuts by Oct. 1, but Centers for Medicare and Medicaid Services last Friday told LePage it wouldn’t meet that deadline.
In a letter to LePage, acting administrator Marilyn Tavenner noted her office has 90 days to review such a request under federal law. If the federal government uses the 90 days it’s allowed, the state might not have a decision in hand until the end of October, well after the targeted Oct. 1 implementation date.
“Why is the state spending taxpayer dollars now to go to court to take away health care from the elderly and people with disabilities when the law states that CMS has 90 days to respond to a request for a state plan amendment?” Rep. Peggy Rotundo, D-Lewiston, asked Nadeau. “Why are we so eager to spend taxpayer dollars to take health care away from people?”
Nadeau noted that Maine’s court filing asks the federal government to pay Maine’s state share of related Medicaid costs for the time it takes to decide on the state’s planned Medicaid reductions.
“We are hoping to recoup the cost,” she said.
The federal government hasn’t yet responded to Maine’s court filings, though the U.S. Department of Justice on Thursday filed a preliminary court document indicating a response is forthcoming. The lawyer who filed that document said Friday she couldn’t comment on the case, and a federal Centers for Medicare and Medicaid Services spokesman said earlier this week that he couldn’t comment on pending litigation.