Q: Why does the state owe hospitals money?
A: The state and federal governments reimburse hospitals for the medical bills of residents in MaineCare, the state’s Medicaid program. The state has owed hospitals reimbursement payments for over 30 years; significant debt began accumulating around 2002. At the time, the state expanded Medicaid eligibility to extend health coverage to more people. The state’s system that paid hospitals weekly on a prospective basis failed to keep pace with the increased claims and the state capped the payments, leading to its current debt of about $186 million. The state debt must be paid to release an additional $298 million in federal funds to the hospitals.
Q: Are we still racking up new debt?
A: No. In 2010, the Legislature approved a new system that pays hospitals on a real-time basis. In 2011, the Legislature authorized funding and implementation of the system, ending accrual of debt.
Q: What does that have to do with liquor sales?
A: Gov. Paul LePage has proposed paying the hospital debt by borrowing the money, then paying it off with profits from the state’s next wholesale liquor contract.
Q: Why is the state considering an expansion of Medicaid?
A: All states are being asked to expand Medicaid coverage through the federal Affordable Care Act. The federal government is offering to pay 100 percent of the added cost for the expansion in the first two years, and 90 percent after that. Democrats want to go along with the expansion, saying it would provide health insurance for about 60,000 low-income Mainers. An additional 10,000 Mainers would keep their Medicaid coverage. Medicaid is considered a linchpin of the health care law, which requires almost all Americans to have health insurance.
Q: So what does Medicaid expansion have to do with the hospital payment?
A: Democrats say that combining the two makes sense because Medicaid is designed to reduce health care costs for hospitals and residents. Republicans have resisted Medicaid expansion, citing unknown costs after the federal reimbursement rate drops to 90 percent. Additionally, Medicaid expansion is viewed as a key component of the health care law that Republicans are still trying to unravel.
Q: Where does it stand now?
A: The House and Senate have given preliminary approval to the hospital debt-Medicaid expansion bill. It requires additional votes before going to LePage.