LD 1932, a direct care bill sponsored by Speaker Ryan Fecteau and carried over from the first legislative session, gives Maine a big chance to keep caregivers, protect access to care, and bring in millions in federal funds.
Overview
- The Governor’s budget proposed to eliminate COLAs, cutting an estimated $84 million in state funding and forfeiting an estimated $138 million in federal matching dollars over two years
- Lawmakers restored approximately $38 million in state and federal COLA funding — a partial fix that leaves workers underpaid and services at risk
- The Revenue Forecasting Commission recently reported Maine ended the fiscal year with a $152 million surplus
- LD 1932, sponsored by Speaker Ryan Fecteau, would raise labor reimbursement rates to 140% of the minimum wage, strengthen training and credentialing, and help close Maine’s care gap
- Passing LD 1932 and fully funding COLAs would improve worker retention, protect access to care, and draw down millions in federal funds — benefiting workers, families, and the state’s economy
As Maine’s Legislature closed the first session of the 132nd legislature, direct care workers — the backbone of the state’s system of supports and services for older and Mainers with disabilities — faced another setback. The Mills Administration proposed canceling scheduled cost-of-living adjustments (COLAs), and lawmakers only partially restored them. Meanwhile, new data reveals the state ended its fiscal year with a surplus far greater than the value of unfunded COLAs. The current status of funding will harm Mainers’ access to care and the professionals who provide those services, while leaving critical federal funding on the table. LD 1932 offers a critical opportunity to correct course.
The push and pull of COLAs for direct care workers over the past four years
Maine should do what it can to invest in the health and resilience of its people and economy. But shortages in the direct care workforce are making that difficult to secure. Direct care workers provide the support that allows people with disabilities and older Mainers to live with dignity, independence, and full participation in their communities. Inadequate wages harm Maine’s ability to attract and retain these workers, leaving thousands of Mainers out of the labor force and limiting economic vitality. MECEP found last year that Maine needs an additional 2,300 full-time workers to meet current needs, with demand expected to grow in the coming years.
In 2021, the Maine legislature established a reimbursement floor for direct care labor at 125% of the state minimum wage, with annual COLAs based on the rate of inflation. This policy, which was implemented for several years ahead of 2025, acknowledged low wages were fueling a workforce shortage in direct care. MECEP analysis determined this still isn’t enough, finding direct care wages should be at least 140% of the state minimum wage to compete in the current labor market.
However, Governor Mills proposed to eliminate these COLAs in her last biennial budget, aiming to close a MaineCare shortfall. The Department of Health and Human Services projected savings of $132 million, with $84 million tied to direct care workers alone.
Legislators pushed back. Through LD 609 and LD 210, they directed approximately $38 million in funding to partially restore COLAs and reject proposed rate review changes. While meaningful, this falls well short of covering the full COLA cost or legal obligations.
Freezing COLAs results in lost federal dollars
Freezing COLAs isn’t just a blow to workers — it costs Maine federal matching dollars. Medicaid is a joint state-federal program, in which the federal government is obligated to match state spending with a substantial federal contribution. MECEP estimated forgoing $84 million in state COLA funding would cost Maine around $138 million in federal dollars. These funds are especially important in the context of the federal government cutting back on other Medicaid funding by reducing eligibility and capping the ability of states to tax providers. Since the federal government’s commitment to matching state spending is unaffected by the recent changes, the state should seek to maximize this reliable source of federal matching funds.
Maine’s $152M surplus questions need for deep care cuts
In May, Maine’s Revenue Forecasting Commission projected a modest near-term improvement in the revenue. But just two months later, after the budget was settled, the Commission announced Maine ended the fiscal year with a $152.2 million surplus. While it remains to be seen how the earlier projections were so far below collected revenue or whether the higher revenue will be sustained, the figure puts into question the necessity of sharp cuts to direct care services.
The Speaker’s plan: LD 1932
LD 1932, sponsored by Speaker Ryan Fecteau, offers a bold path forward. This omnibus bill would:
- Raise direct care labor reimbursement from 125% to 140% of the minimum wage
- Strengthen credentialing, training, and adoption of innovative technology for essential support workers
- Expand stakeholder representation and require biennial reporting on the cost of fully meeting care needs
This legislation directly addresses workforce shortages, enhances long-term system sustainability, and ensures Maine lives up to its commitments.
Fortunately, a similar proposal to one element of the Speaker’s bill was passed and funded. LD 977, introduced by Representative Sally Cluchey, calls on Maine Health Data Organization (MHDO) to develop a plan for using existing claims and other data to annually measure the direct care gap. MHDO is expected to deliver a report to the Joint Standing Committee on Health and Human Services by January 15, 2026, after which lawmakers will need to act to mandate and fund the regular reporting of Maine’s care gap.
Maine can’t afford to wait
Withholding direct care COLAs will cut real wages for some of our most essential yet underpaid workers and over time will drive people out of this workforce. Without adequate professional care, older and disabled Mainers will lose access to essential support, forcing family members out of the workforce and raising long-term hidden costs. Meanwhile, limiting state investments robs Maine of available matching federal dollars.
Maine has the capacity to fund these increases and should prioritize doing so over protecting tax cuts for people with wealth or extending unnecessary and ineffective subsidies to multinational corporations. When the wealthy and corporations pay their fair share in taxes, we all win.