LePage’s claims that Maine’s Medicaid spending is above average are true

PORTLAND, Maine — In his relentless demands for steep Medicaid cuts, Gov. Paul LePage has said Maine spends far more per capita than other states on Medicaid and is high above the national average.

Whether you support or oppose LePage’s cost-cutting proposals, he’s right.

Maine had the nation’s fifth-highest Medicaid coverage rate in fiscal year 2009, 27.8 percent, behind California, New Mexico, Louisiana and Vermont, according to the latest statistics for Maine from the Centers for Medicare and Medicaid Services. The national rate for the same period was 21 percent.

Maine’s Medicaid expenses for that year amounted to $1,890 per resident.
That’s 61 percent higher than the national average of $1,173 per person, according to CMMS statistics.

LePage and others say those numbers show that Medicaid, which goes by the name MaineCare in Maine, is bloated and in need of slashing. If Maine’s enrollment were at the national 21 percent rate, the state would have had about 276,000 people enrolled, 90,000 fewer than actually were.

“I ask all of you, where is the outrage?” LePage said in a recent letter to legislators. “Maine Medicaid programs have grown at an unsustainable rate, and spending is out of control.”

Medicaid is a federal program administered by the states that serves as the country’s primary health insurance program for low-income Americans.
More than 66 million people were on Medicaid in 2010 at a cost of about $384 billion. About two-thirds of the costs were paid by the federal government, and one-third by the states.

LePage has proposed cutting $221 million in Medicaid spending in Maine to reduce a budget shortfall through mid-2013 and bring Maine closer in line to national averages on Medicaid funding and coverage rates.

The Legislature’s budget committee has endorsed a proposal calling for $120 million in cuts to the budget, nearly all in MaineCare, for the current fiscal year that ends June 30 and addressing the rest of the shortfall later.
Lawmakers are expected to give their approval to the budget this week after the proposal stalled in the Senate last week.

The governor, for his part, says while Medicaid coverage is helpful to those in need, the state simply can’t afford the broad coverage it now offers.

Medicaid coverage and costs have grown fast in the past 15 years in Maine.

About 202,000 Mainers had Medicaid coverage in July 2002. By October 2011, that number had grown to more than 361,000 residents, according to the state Department of Health and Human Services.

But the growth didn’t just happen willy-nilly — it was the result of deliberate steps by legislators aiming to increase health coverage for children, parents, the elderly and single poor people in hopes of creating a healthier state.

Expanded Medicaid coverage is one reason the state went from No. 16 a decade ago to No. 8 last year in the United Health Foundation’s annual state-by-state health rankings, said Chris Hastedt, public policy director at the Maine Equal Justice Partners organization. It’s also contributed to Maine having an uninsured rate of 10 percent, the sixth-lowest in the country in the Kaiser Family Foundation’s annual ratings, she said.

“It was a very deliberate set of actions aimed at very specific goals,” she said. “To a very large extent we’ve achieved those goals with important success for people who’ve been covered and for the people of Maine.”

Former state Rep. Mike Saxl was among the legislators who pushed for increased Medicaid coverage of Maine children in 1996. That was followed in later years by additional measures to expand coverage to parents and childless adults and for prescription drugs for the elderly, he said.

At the time, expanding Medicaid was considered a smart move because every dollar in state funds leveraged at least $2 in federal money, he said.
It was also viewed as a cost-saving measure since preventive medicine is cheaper than treating medical problems when they get to crisis stage, he said.

Medicaid is an important policy debate, but there are questions that deserve answers if the funding is going to be slashed, he said.

“How does somebody practically get coverage? Are we saying they want them to have uncompensated care at hospitals and doctor’s offices? That’s an option,” he said. “Are we saying we want them to not have care? That’s an option. Are we saying they should have private insurance? That can be a good idea, but how are they going to afford that private insurance?”

Virtually every state over the years has expanded Medicaid coverage to some level beyond the core minimum requirements set by the federal government.

If Maine provided only the bare Medicaid coverage required by law, it would have just over 250,000 people on Medicaid rather than today’s level of 360,000, state officials say.

But because of Medicaid’s flexibility, the enrollment rates and costs are widely variable among states. While Maine provided some form of Medicaid coverage to 27.8 percent of residents in 2009, only 12.5 percent of New Hampshire residents were Medicaid recipients that same year. Maine and New Hampshire have roughly the same population, but Maine had about 200,000 more people on Medicaid than the Granite State.

California had the highest enrollment rate at 30.2 percent, while Nevada had the lowest rate at 10.9 percent, according to CMMS figures.

Generally speaking, most states through the years have broadened Medicaid coverage more for children than they have for adults, said Robin Rudowitz of the Kaiser Family Foundation in Washington. Maine has expanded coverage to adults more than most other states, she said.

But with the poor economy and revenue collections down, states the past couple of years have been implementing new Medicaid policies to cut spending.

The Kaiser Family Foundation said 47 states made cost-reduction Medicaid changes for fiscal year 2011.

For the current fiscal year, every state but North Dakota planned at least one policy change to contain Medicaid costs, Kaiser said last week in a midyear Medicaid budget update report. Forty-six states planned rate cuts or restrictions for health care providers and 18 states planned to reduce or restrict benefits. Four states, including Maine, planned eligibility reductions, but federal Medicaid officials have denied requests for enrollment procedure changes for Hawaii and Arizona.