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Op/Ed: Legislature enacts Medicaid reforms to avert crisis in April

By Senator Lois Snowe-Mello

(R-Poland)

Recently, the Legislature enacted changes to the Medicaid program designed to prevent a crisis in April, when the state was projected to run out of money. Failure to act would have resulted in a disruption of service for more than 300,000 Mainers served by Medicaid.

Many of the state’s providers would have gone without payment, with many shutting their doors or laying off workers. The magnitude of what the Legislature did cannot be understated given the deep philosophical divides present in what is very nearly an equally divided House and Senate. More on that shortly, but first a brief overview of the problem and how we got here is important.

In November, Governor LePage alerted us to a $221 million shortfall in the state’s Medicaid program. At that time, some 361,315 people were receiving benefits under that program. He also asserted that: since 2002, Medicaid enrollment has grown 78 percent, while Maine’s population grew only 7 percent; Maine insures 35 percent more of its population than the national average; and in 2008, Maine’s per capita Medicaid cost was $1, 895 per person vs. the national average of $1,187.

The governor then submitted a proposal to reduce the Medicaid rolls by 65,000 and a public discussion of whether or not a federal waiver could be obtained to allow Maine to make changes to its program in order to bring state spending in line with future Medicaid program projections.

What followed were months of public hearings, exhaustive work sessions and difficult negotiations that produced a remarkable act of bipartisanship needed to achieve the necessary two-thirds support from the Legislature to act in time. When the process began, virtually nobody thought there would be an agreement, let alone a unanimous one.

Legislatures almost always make changes to proposals submitted by a governor. This case was no exception. The Appropriations Committee chose to adopt some of Governor LePage’s proposals now, by including them in a bill (LD 1816) designed to address the $121 million shortfall in 2012, while keeping his bill (LD 1746) pending to address the problem in 2013 and beyond.

LD 1816 is a unanimous, bipartisan solution supported 13-0 by the Appropriations Committee. It covers the projected $120 million Medicaid shortfall in FY 2012 (which ends June 30), and includes long-term structural reforms that will apply to 2013 and future years. It was overwhelming supported in the House 121-25 (RC# 230), and ultimately in the Senate 27-8.

It was supported by every member of Legislative Leadership (Democrats and Republicans), except Assistant Senate Minority Leader Justin Alfond.

The action taken by the Legislature averts a crisis in April, when the state was projected to run out of money. That would have suspended Medicaid benefits for more than 300,000 Mainers, as well as payments to providers that employ thousands of workers at hospitals, nursing homes, pharmacies, and other health/social service providers that rely on reimbursement for Medicaid-related services.

It also allows the Appropriations Committee to continue work on the Governor’s bill, LD 1746, to address the remaining $85 million shortfall in FY 2013, and make additional structural changes that will protect Maine’s most vulnerable residents going forward. The most contentious and difficult issues remain.

LD 1816 is a notable achievement because it gradually reduces Medicaid enrollment by more than 30,000 by the end of 2013. It includes more than $50 million in structural changes that are applied to the FY 2013 shortfall and will make the program more solvent going forward.

In order to secure the necessary two-thirds support, some last-minute changes were made with the unanimous support of the Appropriations Committee. I fought hard for these changes, which included restoring the scheduled phase out of the Dirigo tax and modifications that lessened the impact of our reforms on hospitals.

Make no mistake about it; this is a difficult response to a difficult crisis that must be addressed fully going forward. Taxpayers should watch elected leaders closely to ensure that their lawmakers continue to make tough decisions. Harder decisions lay ahead. But, for now, we have acted to ensure that a major catastrophe was averted in April.

 

Senator Lois Snowe-Mello (R-Poland) chairs the 125th Legislatures Marine Resources Committee and is a member of the Insurance and Financial Services Committee. Snowe-Mello represents Maine Senate District 15, which includes the Androscoggin County communities of Auburn, Durham and Poland along with New Gloucester in Cumberland County.

 

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