AUGUSTA, Maine — More than 65,000 low-income residents will lose health coverage through the state’s MaineCare program under a sweeping overhaul proposed Tuesday by the LePage administration.

Seeking to address a $120 million shortfall in the Department of Health and Human Services budget in the 2012 fiscal year, the governor took aim at MaineCare, the state’s version of the federal Medicaid program. His proposal called for tightening eligibility requirements, eliminating services and repealing coverage entirely for thousands of MaineCare recipients to bring Maine’s program closer to national averages.

“We have 361,000 people on Medicaid in the state of Maine,” LePage said at a State House press conference. “That is pushing 30 percent of our population. The national average is running at 20 percent.”

DHHS also is projected to face a $101 million gap in the next fiscal year.

Facing a loss of state coverage are childless adults, 19- and 20-year-olds and some parents. Dental, occupational and physical therapy, adult family care and other services are also at risk, as well as access to brand-name prescription drugs.

The administration’s broad strategy called for axing eligibility and services that exceed national benchmarks and easing Maine’s dependence on federal dollars. The federal government used to kick in roughly $3 for every $1 the state contributed to MaineCare, but now offers about $1.70.

The MaineCare overhaul is part of a supplemental budget proposal that lawmakers will evaluate when the Legislature convenes in January. MaineCare, including state and federal spending, represents a third of the total state budget.

Democrats vowed to fight the proposal, calling it “dangerous and shortsighted.”

“These proposals turn MaineCare on its head,” said Rep. Margaret Rotundo of Lewiston, the lead Democrat on the Appropriations Committee. “They will impact in a negative way every single family in the state of Maine.”

The plan slashes state subsidies for the Fund for a Healthy Maine, which allocates money from the 1998 tobacco settlement for smoking and substance abuse prevention programs, as well as health initiatives for the young, elderly and disabled. That rollback, paired with reduced contracts and administrative savings, represents $25.1 million in projected savings this fiscal year.

More money would be save by reducing behavioral health services for children, dropping payments to some hospitals and limiting mental illness crisis services.

“This is a very, very difficult day for all of us,” DHHS Commissioner Mary Mayhew said at the press conference. “There is nothing easy about the proposals we are putting before the Legislature.”

MaineCare enrollment has ballooned 80 percent over the last decade, far outpacing the state’s overall population growth, LePage said. He argued his plan makes tough choices to rein in skyrocketing enrollment and tackle the reality of dwindling federal reimbursements.

“We deliberately focused on the elderly and the disabled as populations we wanted to avoid harming to the extent that we could,” he said.

Childless adults will take the hardest hit, LePage said. That demographic, consisting of beneficiaries age 21 to 64 with no dependents in the home and no disabilities, has swelled from fewer than 3,000 in 2002 to nearly 19,000 today.

Democrats said Mainers across all populations will suffer and continued to fault the administration and DHHS for presenting unverified figures after months of discussions. Last month, the department surprised and angered some lawmakers by revising its initial shortfall estimate of $71 million up to $121 million, a $50 million difference.

“I don’t believe the administration has met their burden to demonstrate to us how we can have such significant changes and fluctuations in figures,” Senate Democratic leader Barry Hobbins said after the press conference.

The supplemental budget doesn’t address other factors that could dramatically alter the department’s financial outlook. Several audits of Medicaid-funded programs are under way, with a draft report expected in January, and Congress continues its maneuvering to slash the federal deficit. The proposal also did not address shortfalls in the general assistance program, which reimburses some costs to municipalities.

The Appropriations Committee plans to hold hearings on the supplemental budget Dec. 14 and 15. The next week, members of the Appropriations Committee and the Health and Human Services Committee will conduct work sessions on the budget bill.

The administration wants the MaineCare changes to take effect by April 1, 2012, putting pressure on lawmakers to act by the end of January.

Jackie Farwell

I'm the health editor for the Bangor Daily News, a Bangor native, a UMaine grad, and a weekend crossword warrior. I never get sick of writing about Maine people, geeking out over health care data, and...