Friday May 24, 2013 | 02:24 PM
Posted by Bruce Poliquin

Yesterday, Maine Republican Gov. Paul LePage vetoed a bill passed by the State Legislature that would have paid Maine’s 39 hospitals the $484 million owed them by the state only if the huge Medicaid health care welfare program is expanded further. Ironically, Maine’s unaffordable Medicaid program caused the hospital debt in the first place.

It is unlikely that the Democratic majority in the Legislature will be able to muster enough votes to override the governor’s veto. As a result, the legislative majority will probably decide whether or not to vote to pay off the hospital debt and, separately to expand Medicaid, as requested by Gov. LePage.

Public opinion polls show Maine residents overwhelmingly want Augusta to pay the hospitals the $484 million they are owed. Maine hospitals employ 30,000 workers with mostly good-paying jobs including benefits. Hospitals have been laying off employees and postponing the purchase of new equipment to treat patients because the state has not fully paid them for services already provided to Medicaid patients.

Maine’s unusually generous Medicaid program, called MaineCare, was originally created as a medical welfare safety net for disabled, elderly sick, and poor Mainers. During the past dozen years, the program expanded to include able-bodied 19- and 20-year-olds, childless adults, and many middle-income families. Services provided include podiatry, chiropractic, and dental care not covered in most other states.

Today, MaineCare enrolls approximately 341,000 fellow residents, 27 percent of our entire population - the third-highest state enrollment rate in the country. MaineCare tax dollars are spread so thin among so many citizens that roughly 3,100 disabled and elderly Mainers are on waiting lists to receive the health care services they desperately need.

Maine families pay among the highest taxes in the nation, in part, to fund this behemoth health care welfare program. Annual Medicaid expenses exceed $700 million, consuming 24 percent of the entire state budget. The cost of Medicaid benefits is increasingly crowding out adequate funding for road and bridge repair, public safety, law enforcement, and education for our children.

Since January, the legislative majority has argued that further expanding MaineCare to cover an additional 70,000 people would actually save tax dollars for Maine families and businesses. The legislators have claimed that Washington’s promise to pick up 100 percent of the new health care costs for the first three years, and then 90 percent for the next seven years, is a good deal for Maine taxpayers.

However, the Maine Department of Health and Human Services (DHHS), which administers MaineCare, reports that this second round of welfare expansion would cost taxpayers an additional $400 million over the first 10 years. Thereafter, Maine taxpayers would presumably be on their own and on the hook for another $75 million per year. And, that’s if Washington keeps it funding promise for the first 10 years. 

How much confidence should Maine have that the federal government, which is $17 trillion in debt and borrows 40 percent of every dollar it spends, will be able to keep Medicaid dollars flowing to Augusta and, if so, at what rate? A few years ago, Washington paid 75 percent of the MaineCare benefit costs.  Today, it pays 62 percent and that rate is falling.

Supporters of another round of MaineCare expansion have insisted that the overall number of uninsured Mainers would decrease with the program’s growth. During the last expansion, however, the total number of uninsured remained about the same as thousands dropped their private coverage and enrolled in MaineCare, forcing taxpayers to pick up the tab. Roughly 60 percent of the proposed new enrollees are single males under 45 years old; all are able-bodied.

Medical welfare expansion advocates have argued that “free” charity care provided by hospitals and doctors would decline if another 70,000 mostly younger and able-bodied single males are provided taxpayer-funded Medicaid services. But, during the previous welfare expansion, charity care nearly tripled, placing an enormous financial strain on our hospitals.

Some legislators have said that expensive emergency room visits would fall when more Mainers are covered by MaineCare. Studies by Harvard University, the Massachusetts Institute of Technology, and the Muskie School at the University of Southern Maine conclude that Medicaid recipients around the country use ERs just as often as those not covered by the program.

Although well-intended, our state legislators should proceed with caution before further expanding Maine’s health care welfare program.  The last time MaineCare was expanded the overall number of Mainers with health insurance remained essentially the same; the cost to taxpayers soared; hospital debt accumulated; charity care tripled; and emergency room visits did not decline.

A better solution would be to use limited taxpayer dollars for precious MaineCare services targeted to disabled, elderly sick, and poor Mainers who most need the assistance. Then, let’s learn how other states have embraced less-expensive free-market solutions, instead of costly big-government entitlements, to help provide health insurance to able-bodied childless adults.

Let’s remember that business investment and jobs are drawn to states with smaller governments, lower taxes, and less public debt. Expanding an already unsustainable health care welfare program would send the wrong message to entrepreneurs looking to bring their companies and jobs to Maine. 
 

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About the Author

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.

Follow Bruce on Facebook (facebook.com/BrucePoliquin) and Twitter @BrucePoliquin.

Previous entries

July 2013

June 2013

May 2013

April 2013

March 2013

February 2013

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