CHELSEA — I don’t blame many people for thinking that expanding Medicaid in Maine under Obamacare sounds like a great idea at first glance. Free money from the federal government? More people covered by free health insurance? Where do we sign up?
However, when you examine the fine print, as well as Maine’s past experiences with welfare expansion, you quickly begin to have second thoughts.
Medicaid expansion entails putting 70,000 or more able-bodied adults on medical welfare at a massive cost to the state. Both the Legislature’s nonpartisan budget office and the Department of Health and Human Services have put the net cost to state taxpayers at tens of millions of dollars a year. An independent analysis ordered by the DHHS puts the figure as high as $125 million a year.
A recent proposal to combine Medicaid expansion with a managed care initiative has failed to increase lawmakers’ support for expansion so far.
There are several reasons for that.
• Managed care and Medicaid expansion are two separate issues. Any benefit to the state that could come from implementing managed care is far outweighed by the cost that would accompany Medicaid expansion.
• The LePage administration and DHHS Commissioner Mary Mayhew have already implemented accountable care organizations that have managed costs, keeping Medicaid cost growth to 1 percent over the past few years, instead of the 4 percent national average.
• Medicaid expansion, if enacted, would be permanent. Managed care, on the other hand, would have to be rolled out over time. This sounds an awful lot like the “increase taxes now, cut spending later” promises that pervade Washington.
Like a pitchman in a late-night TV infomercial, proponents of welfare expansion are telling Mainers to “act now,” take advantage of a special offer and don’t worry about the long term. They’re even trying to tell us we can drop out after three years if we don’t like it.
But what they don’t tell you is what happened the last time Maine bought this bill of goods. We expanded Medicaid in the late 1990s and early 2000s. Since then, Medicaid spending has doubled as a share of our state budget, increasing from 13 to 25 percent of all state spending. By 2024, even if we don’t expand again, we’re estimated to spend a whopping 36 percent of all our state tax revenue on Medicaid.
Proponents of past expansions promised that we’d see lower emergency room usage, less charity care provided by hospitals, fewer uninsured Mainers and more benefits. All of those things have proven to be demonstrably false.
They told us that it wouldn’t cost much at all, but their estimates were shattered. In addition, federal matching rates have been slashed, further burdening Maine taxpayers who already rank sixth in the nation for their tax burden.
Perhaps more important than charts in a budget document or unrealized policy promises is the real toll this welfare bonanza has taken on the average Mainer.
There are 3,100 severely disabled people on waiting lists for Medicaid services. The more we expand free coverage to a population of 70,000 that is 60 percent male, 60 percent under the age of 45, 75 percent single, all able-bodied, all of adult working age and 42 percent addicted to tobacco products, the less money we will have to take care of the truly needy.
We see the cannibalizing effect of welfare spending in other state agencies, too.
Education Commissioner Jim Rier recently wrote that Medicaid spending growth has inhibited the state’s ability to meet its obligation to fund 55 percent of education costs.
The heads of Maine’s environmental agencies recently came out against expansion because of its continued threat to their mission to protect Maine’s environment and natural resource-based economy.
We’ve even seen politicians raid oil spill cleanup funds just to plug the Medicaid-induced leak in our budget.
Fortunately, there is a better way.
A constituent recently emailed one of my colleagues on the Health and Human Services Committee and expressed frustration that the state is considering committing itself to a massive new welfare spending obligation. The woman would be eligible for expanded Medicaid but was able to pick up a federally subsidized private plan on the exchange for just $5 per month.
“We don’t need to expand Maine’s Medicaid system when low income people can get covered for less than five dollars a month,” wrote the constituent.
What’s more, numerous studies have shown that private plans are better than Medicaid anyway. The higher provider reimbursement rate means better quality of care and better access to care.
Forty thousand of the 70,000 people who would be eligible for expanded Medicaid are eligible for these plans on the exchange. I don’t support the Obamacare law in its totality, but I support plunging Maine down its fiscal rabbit hole even less.
Declining Medicaid expansion and choosing to allow people to find subsidized coverage on the exchange is a great alternative that keeps the burden on the federal government and prevents Maine’s economic competitive advantage from being harmed even more than it has over the past several years and decades of repeated welfare expansion.
I encourage all concerned Maine citizens to look past the hype and rhetoric and examine the facts on, history of and alternatives to Medicaid expansion. Only then can we avoid repeating the mistakes of the past.