Maine has historically struggled to manage the costs of its Medicaid program. Over time, it has come to consume a growing portion of the state budget.
But that reality isn’t unique to Maine.
Between 2000 and 2013, Medicaid came to consume a growing portion of state revenues in 49 states, averaging 12.2 percent of state revenues in 2000 and 16.9 percent in 2013, according to a new analysis of state fiscal data by the Pew Charitable Trusts.
What sets Maine apart is that it saw the largest jump of any state in terms of the percentage of the state budget Medicaid came to consume. In 2000, the public health insurance program for low-income residents was responsible for 11.4 percent of the budget, according to Pew. By 2013, that portion had grown to 22.1 percent.
The 10.7 percentage point jump was the highest of any state in the country, with California and Minnesota trailing close behind. North Dakota was the only state that saw Medicaid shrink as a share of its state budget.
In raw dollar terms, that was a $326 million, or 78.6 percent, jump in Maine’s Medicaid budget line, according to the Maine Legislature’s Office of Fiscal and Program Review.
What ‘s behind the numbers?
— Health care costs in Maine are high — in 2009, Maine ranked fifth in the nation for per-capita health care spending. And they grew more quickly in Maine than elsewhere during the period in question: Spending rose 88.6 percent in Maine between 2000 and 2009, compared with 79.5 percent in the rest of the country.
— Maine has typically had a high percentage of its population enrolled in the health insurance program. In 2012, it was tied with West Virginia for the highest portion, at 21 percent, according to the Kaiser Family Foundation.
— The time period covered by the Pew survey saw Maine expand Medicaid coverage to new populations — parents with higher incomes and adults without children — three times, according to the Legislature’s Office of Policy and Legal Analysis.
— But the populations that received the expanded coverage didn’t come to dominate Medicaid spending. Traditionally, the aged and disabled population, who have high health care costs, have done that. In 2011, they accounted for 75 percent of Maine’s Medicaid spending, according to Kaiser, compared with 63 percent nationally. Maine ranked eighth in the nation for the portion of its budget devoted to the aged, and fourth for spending on the disabled.
— Accordingly, Maine’s spending per Medicaid enrollee has traditionally been high. In 2009, it was 16th highest in the nation, at $8,077, though Maine reined in its per-enrollee spending in subsequent years. In 2011, according to Kaiser, Maine’s figure was 22nd highest ($5,968) and closer to the national average. To show the contrast among different enrollees, spending per disabled recipient was $14,386 in 2011 (36th highest in the nation) and $8,932 for each aged enrollee (43rd in the nation), compared with $2,189 per non-disabled adult and $2,526 per child.
— Another factor to consider is a lack of significant state revenue growth, especially after 2007, meaning a program with growing costs comes to consumes a larger piece of a stagnant pie. According to another Pew analysis, Maine’s revenue in the third quarter of 2014 was still 5.2 percent lower than it was at its 2007 peak, adjusted for inflation.
Now, Maine has rolled back coverage levels, but among the populations that tend to cost the program less. The question facing the state again is whether Maine should expand coverage under the Affordable Care Act to cover many of the parents and adults without children who lost coverage at the start of last year, plus about 50,000 more.
Would the expansion — under which the federal government would assume 100 percent of the cost of covering at least 60,000 childless adults, then 90 percent in the long term — simply mean Maine will continue to spend a greater portion of its state budget on Medicaid? Not necessarily.
The last time the federal government kicked in higher Medicaid funding rates — as part of the 2009 economic stimulus act following the recession — the percentage of Maine’s state revenues devoted to Medicaid declined.
Plus, an analysis released earlier this month by Manatt Health Solutions projected $26.7 million in budget savings for Maine in 2016 if it expands Medicaid since a number of state expenditures can be shifted to a Medicaid category fully funded or almost fully funded by the federal government rather than state dollars.