The proposed $221 million in cuts will hurt Maine’s economy. Jobs will be lost, health care costs will be shifted, the financial stability of countless families will be comprised, and prospects for future prosperity will be curtailed.
Based on the information provided by the administration MECEP has conservatively modeled projected job losses. The results of this analysis are attached to my testimony. In short, the proposed $221 million in cuts will cost nearly 4,500 jobs.
The cuts will also cause Maine to forego federal matching funds, costing the state’s economy another $240 million. This is penny-wise and pound-foolish.
Calling these cuts a response to a structural gap is a mischaracterization. The Affordable Care Act changes the picture in 2014. Cuts now will likely obligate us to spend more, not less, on Medicaid down the road. This is a critical point that I urge you to evaluate in more detail.
The Administration says this is an effort to bring Maine in line with national Medicaid enrollment numbers. In fact, as a result of the Affordable Care Act, other states are actually moving toward the Maine standard. This Act will also provide subsidies to those who lose coverage and cannot afford private options. Currently, there is no such alternative for the 65,000 people slated to lose coverage under this proposal.
The Administration’s characterization of the problem is a misdiagnosis and their proposal is a misguided treatment plan. We are in this hole because of a recession-induced collapse in revenues and ill-conceived tax cuts that further compromise our revenue picture.
There are better solutions, but first we must redefine the problem and be clear about desired outcomes.
We have a health care crisis. This proposal will actually increase rather than decrease health care costs. At the very least, it will shift costs from the state to businesses, hospitals, private insurers, and local government. The proposal also undermines prevention and jeopardizes efforts to get better value from current health care spending.
The last time Maine faced a fiscal challenge of this magnitude was during the McKernan Administration. Then, policymakers averted crisis with a balanced approach, one that considered both spending cuts and increased revenues.
The current approach is out of balance and will worsen the problem. The proposed cuts undermine programs for those hardest hit by the recession, increase job loss, shift costs, and put our economic future at risk. Slashing services and critical investments just when we need them most is not the right prescription.
The choices you make as Legislators will have lasting consequences for all Maine people. I urge you to seek alternatives that preserve services critically important to families, children, seniors, and disabled individuals; get Maine people back to work; and put Maine on a better path to prosperity.