AUGUSTA — Republican Gov. Paul Le-Page and the Democratic-controlled Legislature appear to be moving toward a consensus that would expand Medicaid in Maine and end a month-long political standoff over debt payments to the state’s hospitals.
LePage signaled Monday that he’s open to participating in the federal health care law’s Medicaid expansion program, but will seek the “best deal for Mainers.”
At the same time, Democratic legislative leaders released a plan to pay Maine hospitals the $484 million that they’re owed.
LePage has been urging lawmakers to dedicate revenue from a new wholesale liquor contract to the hospital payments. But Democrats have not acted on his bill, making it clear that they want Medicaid expansion before they support the hospital reimbursements.
Monday’s developments indicate that a path may be found that gives both sides what they want.
Hospitals would receive $186 million in back payments from the state, which would trigger another $298 million in payments from the federal government. That money would enable hospitals to fund renovation or expansion projects and add jobs.
The Medicaid expansion would make 55,000 more low-income people eligible for MaineCare, the state’s version of Medicaid, according to an analysis by the Kaiser Family Health Foundation.
Those people would be “able-bodied” parents, and adults who have no children and earn as much as 133 percent of the federal poverty level — just over $20,500 a year for a two-person household.
Adrienne Bennett, LePage’s spokeswoman, said Monday that the administration will initiate discussions with the federal government over a Medicaid expansion. She said the governor will seek assurances that Maine is “getting a return on investment.”
Bennett would not say what the administration wants in its deal. However, LePage has often lamented that Maine was penalized for increasing Medicaid eligibility voluntarily in 2003 because federal match funding has declined since then.
LePage’s shift on Medicaid drew praise from Democratic legislators.
“We’re pleased to see the governor is considering ways to increase health care coverage for Maine people while also saving the state significant taxpayer dollars,” said House Speaker Mark Eves, D-North Berwick, in a prepared statement.
Eves was optimistic that Republicans and Democrats could reach an agreement on Medicaid expansion and a plan to repay Maine’s hospitals, said his spokeswoman, Jodi Quintero.
Some of the coverage categories in the Medicaid expansion program would be 100 percent funded by the federal government from 2014 to 2016 under the Affordable Care Act. In subsequent years, reimbursements would gradually decline to 90 percent of the state’s costs.
Bennett said other governors have been expanding Medicaid because “their states were far behind Maine in providing benefits.”
Rep. Linda Sanborn, D-Gorham, has submitted a bill that proposes expanding Medicaid eligibility, but its details have not been published.
Jeff Austin, spokesman for the Maine Hospital Association, said the trade group for Maine’s 39 hospitals is waiting to see Sanborn’s bill before publicly committing to Medicaid expansion.
Although Medicaid expansion would likely drive down their costs by reducing charitable care, the hospitals would have been at odds with LePage had they lobbied for expansion. That might have jeopardized his support for paying off the hospital debt.
Republicans nationally have been urged to reject Medicaid expansion because it’s in President Obama’s Affordable Care Act.
However, several high-profile Republican governors have agreed to participate, in part because of the high reimbursement levels. In each of those states, hospital groups have backed expansion.
LePage’s willingness to consider Medicaid expansion now is noteworthy because of the deep opposition he expressed just a few months ago.
In a letter to the Obama administration in November, LePage described the Affordable Care Act as a steppingstone to a single-payer system. “Maine will not be complicit in the degradation of our nation’s premier health care system,” he wrote.
Bennett insisted Monday that the governor’s position on expansion is unchanged and that negotiations with the federal government about participating in the program are unrelated to the hospital association’s position.
The Democrats introduced their plan to pay hospitals during a news conference just 30 minutes before a full day of public hearings on LePage’s plan to use the next liquor contract and a revenue bond to repay the state’s share of the hospital debt.
Unlike the governor’s plan, the Democratic proposal includes no borrowing. Instead, it would use an upfront payment from the chosen liquor contractor to pay the hospitals by September.
Democratic leaders touted the proposal because it would pay the hospitals by a specific date.
They said the timetable for LePage’s plan is uncertain, given its use of a revenue bond and concerns that the plan, as written, may violate a provision in the state Constitution.
The Democratic plan will be accompanied by several measures to address the high cost of health care, including billing transparency and cost containment.
“It’s important to remember that this issue is not just about debt, it’s also about high health-care costs,” said Senate President Justin Alfond. “Any plan to pay off debt to the hospitals should also address the cost drivers and reforming our system to prevent this debt from building up again.”
Austin, the lead lobbyist for the Maine Hospital Association, said the debt payment plan should be separate from any other reform efforts.
“The debt was accrued when we provided services at terms that were in law at the time,” he said. “We shouldn’t have to go back and bargain for that, meaning we shouldn’t have to agree to support or oppose anything else.”
Nonetheless, Austin said the hospital association “appreciated that (Democrats) are seeking earnestly to pay us back as the governor has been for the past several months.”
Steve Mistler can be contacted at 620-7016 or at:
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