Rural hospitals, prescription aid for seniors suffer cuts in LePage’s proposed budget

Posted Jan. 11, 2013, at 8:04 p.m.

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Health and Human Services Commissioner Mary Mayhew
Health and Human Services Commissioner Mary Mayhew

AUGUSTA, Maine — Gov. Paul LePage’s proposed budget for the next two years includes cuts that could be felt by rural hospitals, senior citizens who receive aid to help them pay for prescription drugs, and municipalities whose general assistance funds are in high demand.

Still, LePage’s $6.3 billion, two-year budget proposal increases overall funding for Department of Health and Human Services programs, including Medicaid.

That’s largely a result of rising health care costs in the state’s Medicaid program and a reduction in federal matching funds, Health and Human Services Commissioner Mary Mayhew said Friday as members of LePage’s Cabinet unveiled the governor’s budget proposal. LePage didn’t appear at Friday’s budget presentation.

Also on Friday, Cabinet members introduced a supplemental budget package aimed at plugging a $112 million hole in the current year’s budget, which is in effect until June 30. The bulk of that budget hole is a shortfall in the state’s Medicaid program that the LePage administration is proposing to fill in part by dipping into the state’s budget stabilization, or “rainy day,” fund for more than $40 million, and by delaying $18.5 million in local school aid payments from one fiscal year to the next.

Both the supplemental and two-year budget packages released Friday eliminate funds for the “Drugs for the Elderly” program, saving $1.75 million for the last quarter of the budget year and $7 million annually after that.

The two-year budget proposal also scales back the Medicare Savings Plan to the minimum levels mandated by the federal government. Currently, according to Mayhew, only Maine, Connecticut and Washington, D.C., exceed the federal minimum on that program, which offers senior citizens aid for prescription drugs through the state’s Medicaid program.

“We clearly understand these choices are difficult,” Mayhew said. “At the same time, we understand the importance of making difficult decisions today in order to stabilize future spending.”

Maine received clearance from the federal government earlier this week to make cuts to the Medicare Savings Plan that will affect about 8,300 seniors.

Mayhew said Friday that senior citizens soon will qualify for new prescription drug assistance programs under the Affordable Care Act, the Obama administration’s federal health care law. She said prescription drug assistance is also available through some retailers, including Wal-Mart.

“It is imperative that I underscore the challenge we’re up against to fund core services in the Medicaid state program,” she said.

Sen. Dawn Hill of York, a Democrat and co-chairwoman of the Legislature’s budget-writing Appropriations Committee, said the prescription drug aid cuts concerned her. “Just because the feds said we could go there doesn’t mean we have to,” she said.

But there are some programs the state can’t afford as revenues collections fall, said Sen. Roger Katz of Augusta, the assistant Senate Republican leader. “When we hear we’re one of just two states in the country funding that program, it’s time to rethink it,” he said.

LePage’s supplemental and two-year budgets also reduce reimbursement rates for the state’s 16 Critical Access Hospitals, which are hospitals in rural areas that provide 24-hour emergency care. And the budgets cap annual general assistance payments to municipalities at $10.1 million, reducing state expenses by about $6.7 million over the two-year budget cycle.

The budgets also book savings through reforms DHHS has started within the MaineCare program to have health care providers more closely coordinate patients’ care in order to lower costs. DHHS is projecting $15.6 million in savings over the course of the two-year budget cycle as a result.

In addition, the budget includes a proposal that will cost about $6.7 million over the next two years and allow 85 people who have intellectual disabilities and autism to receive certain home-based services.

“This will not, by any stretch, allow us to fund all of the individuals on the wait list,” Mayhew said.

Now, it falls to members of the state Legislature to wade through the administration’s proposals and come up with a budget package on which the Democratically controlled Legislature and Republican LePage can agree.

The Department of Health and Human Services, an agency subject to frequent cost overruns, was sure to be a focus area of the LePage administration’s budget. LePage has repeatedly called for scaling back the state’s welfare programs, which DHHS administers. The department’s programs account for 35.2 percent of spending — nearly $2.22 billion — in his budget proposal.

Medicaid accounts for 23 percent of LePage’s budget proposal, or $1.45 billion.

LePage’s first two-year budget, introduced two years ago, targeted the state’s welfare programs more heavily. It allowed the state to cut off food stamps, or TANF benefits, to drug felons convicted within the past 20 years who failed a series of drug tests. The state, however, hasn’t implemented that provision of the budget, citing potential implementation costs and the potential that courts won’t allow drug testing as a condition for receiving welfare benefits. Apart from the budget proposal, the LePage administration is proposing to prohibit convicted drug felons from receiving TANF benefits.

The last budget also imposed a five-year lifetime limit for receiving benefits from the Temporary Assistance for Needy Families program. The number of TANF recipients in Maine has since dropped, but many of those whose benefits expired have turned to local governments for assistance.

Mayhew on Friday said the new budget will propose allowing towns and cities to cut off general assistance to people who no longer qualify for TANF and turn to municipalities for general assistance.

“We want to provide greater flexibility ultimately relating to how they manage their programs,” Mayhew said.

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