MaineCare Expansion Is Still A Great Deal

February 24, 2016

Expanding MaineCare is a good deal for Maine―not only will it improve health care access for tens of thousands, its impact on Maine jobs and economy will benefit us all. Mainers know a bargain when they see one—but somehow, we’ve allowed legislators and the governor to let almost a million dollars a day slip through their hands since January 1, 2014. Let’s hope this time, Yankee frugality prevails over ideology.

To view the column on the Times Record website, click here.

$720 million is a lot of money. How much? It’s about twice the amount spent from the state’s highway fund every year. But it’s also the amount of money Maine has left on the table since 2014 by failing to expand MaineCare (Maine’s Medicaid system) and take advantage of a huge infusion of federal money to our state. Bipartisan majorities have passed five MaineCare expansion bills but have fallen short of the two-thirds necessary to override Gov. LePage’s veto.

This year, there’s reason to hope the outcome will be different. Republican Senator Tom Saviello of Wilton, is leading the latest bipartisan effort to level the playing field and provide equal access to affordable health care. Just as important, pressure is growing as Maine becomes increasingly isolated in its failure to accept federal funds, and as the body of evidence grows that MaineCare expansion is a boon for Maine’s jobs and economy.

Expansion opponents overlook state budget savings that will offset future costs. An October 2015 Kaiser Family Fund survey of state Medicaid directors reported that a number of expansion states have indeed realized such savings. Closer to home, a recent Maine Health Access Foundation (MEHAF) commissioned report identified $26.7 million in net savings to the overall state budget had MaineCare expansion taken effect in 2016.

Here are ten reasons Medicaid expansion makes budget sense for Maine:

  1. The federal government picks up most of the tab. Through 2016, the federal government is committed to paying 100% of the costs of expanding Medicaid in the states. In 2017, that share will decrease to 95%, and to 90% in 2020. And the state share is legally capped at 10% for those in the expanded program. It’s highly unlikely that future congressional majorities will vote to take millions of dollars and access to affordable care away from their constituents.
  2. The cost of covering those newly eligible under expansion (mostly adults without disabilities) is lower than the per-person cost of those MaineCare currently covers. MaineCare already covers the most vulnerable populations (the elderly, disabled and children) who require the most and the costliest care.
  3. Expansion will effectively move some individuals from the existing MaineCare program, and into the expansion category (which the federal government reimburses at the higher rate).
  4. Expansion will mean savings in other areas of the state budget (e.g., mental health and substance abuse programs, prescriptions for seniors, family planning, and treatment for prisoners).
  5. Better preventative care for those expansion covers will result in lower future health care and related costs.
  6. Other Affordable Care Act (ACA) reforms will slow the rate of growth in state Medicaid spending for those in the existing program; the Congressional Budget Office predicted increased state costs of only 2.8% over Medicaid costs without ACA passage.
  7. Hospitals will gain more revenue from newly-insured patients resulting in increased Maine hospital tax revenue.
  8. Hospital debts from uncompensated (or “charitable”) care will drop by around 40%, according to a Robert Wood Johnson Foundation study , reversing the trend of Maine’s hospitals taking on ever-increasing debt loads over the past few years.
  9. MaineCare expansion will create more than 3,000 jobs in Maine and stimulate more than $300 million in Maine economic activity. Not only is this better for all Mainers, but a stronger economy means $16-18 million in additional state revenue from sales and income taxes according to a 2013 Maine Center for Economic Policy (MECEP) estimate.
  10. States with cost overruns have underestimated the number of people eligible to enroll. Maine has an advantage because we’ve insured some of these people before (prior to the 2014 changes to MaineCare eligibility) ―but regardless, these aren’t costs that inevitably spiral out of control; it’s simply a matter of budgeting accurately.

Expanding MaineCare is a good deal for Maine―not only will it improve health care access for tens of thousands, its impact on Maine jobs and economy will benefit us all. Mainers know a bargain when they see one—but somehow, we’ve allowed legislators and the governor to let almost a million dollars a day slip through their hands since January 1, 2014. Let’s hope this time, Yankee frugality prevails over ideology.

James  Myall is a resident of Topsham and a policy analyst at the Maine Center for Economic Policy (mecep.org)