Wednesday, April 16, 2014
The public debate is getting louder about whether or not Maine state government will pay $484 million it owes to 39 hospitals across Maine. This debt accumulated over the past dozen years when our elected officials chose not to fully pay the hospitals for services provided to Medicaid patients.
The graph below shows the growth of hospital debt from $10 million in 2000 to $484 million today. The data was extracted from state government’s Comprehensive Annual Financial Reports (CAFR).
The $484 million owed by Augusta to Maine’s 39 hospitals was caused by overspending on the taxpayer-funded Medicaid program, called MaineCare. This unaffordable program was originally created as a health care safety net for the elderly sick, disabled, and working poor. Today, it includes able-bodied 19 and 20 year-olds, and many middle income families. The huge program enrolls 341,000 of our residents -- 27% of our entire state population.
MaineCare pays for services not covered in most other states such as chiropractic, dental, occupational and physical therapy, and podiatry care. MaineCare dollars are spread so thin among so many residents, that some of our most vulnerable families do not receive the health care they desperately need.
The Maine Constitution requires our public officials to balance the state budget every June 30. I scratch my head and wonder how our political leaders could claim the books were balanced while piling up hundreds of millions of dollars of unpaid hospital bills for several years running.
Our state constitution allows borrowing (by selling bonds to investors) to pay for road and bridge construction and other “capital projects.” But, it prohibits state government from borrowing to pay for “operating expenses” like public education and Medicaid benefits. That’s why Augusta was not able to borrow money to overspend on the Medicaid program. Our elected officials simply chose not to fully pay the hospitals what they were owed, and racked up the $484 million hospital debt instead. With that kind of financial mismanagement for so many years, it’s no wonder why Maine state government is flat broke and struggling to pay its bills.
Maine families are being hurt because our hospitals have not been paid what they are owed. Hospitals are laying off employees, freezing salaries, and postponing the purchase of new equipment to better treat their patients.
Maine’s 39 hospitals employ 30,000 fellow citizens. Every two weeks, 30,000 paychecks buy groceries to feed the kids, heating oil to stay warm, and gas for the car. Every two weeks, that $50 million payroll ripples through our state economy providing even more jobs for our fellow Mainers.
It’s time for Augusta politicians to do what’s right and pay the hospitals the $484 million they are owed. Right now, the State Legislature is considering a plan to use liquor sale revenues to pay off the hospital debt. The plan prevents those liquor revenues from being spent on government programs, like MaineCare, that we cannot afford. I like that idea – a lot.
Maine voters are watching to see if our elected officials will fix this serious problem they themselves created. By finally addressing this big issue head-on, the Maine Legislature will directly help the people they serve. Such an opportunity does not often present itself. Let’s hope our state legislators all work together and have the good sense not to kick this fiscal can down the street any longer.
Bruce Poliquin is the former Maine State Treasurer and a 2012 Republican primary candidate for the United States Senate. He has 35 years of experience owning and managing businesses. Bruce is a proud third-generation Franco-American Mainer and Harvard University graduate. Visit BrucePoliquin.net for his most recent commentary and analysis on media outlets throughout the State about the important issues facing Maine families and their jobs.