January 27

Maine Voices: Affordable Care Act presents state with unprecedented economic opportunity

If the investor were a private company, political leaders would have rolled out a red carpet.

By Garrett Martin

AUGUSTA — Imagine a banner headline in this newspaper: “$338 Million Investment Projected to Support 4,400 Jobs, Add $500 Million Annually to Maine’s Economy.”

about the author

Garrett Martin is executive director of the Maine Center for Economic Policy in Augusta and author of “Unprecedented Opportunity,” the progressive think tank’s analysis of the Affordable Care Act’s potential economic benefits for Maine.

That’s roughly equivalent to all of the jobs at L.L. Bean and the total that all arts, entertainment, and recreation businesses combined contribute to Maine’s gross domestic product each year. This is the unprecedented opportunity Maine has if we accept federal Affordable Care Act funds to expand health coverage to nearly 70,000 people.

Why, then, have the governor and Legislature failed so far to accept this deal?

If the investor were a private company, political leaders would have rolled out a red carpet and promised tax breaks and other incentives to seal the deal.

Does the federal government expect too much in return? No. It hasn’t asked Maine to waive zoning regulations, give it a juicy tax increment financing deal or provide other inducements.

Will, as opponents contend, the increased health coverage cost state taxpayers too much? No. In fact, the federal government will pay 100 percent of the cost for eligible individuals over the next three years. Only then will the federal government begin to reduce its contribution to 90 percent by 2020.

In addition to the jobs and economic boost, Maine will also realize about $23 million annually in additional state and local revenue. Based on analysis by the state’s nonpartisan Office of Fiscal and Program Review, the Maine Center for Economic Policy projects this will more than offset any new cost to the state from 2014 to 2016. Just in case, the bill currently before legislators sunsets the program in three years, requiring renewed approval for it to continue.

Since Maine shipbuilders launched the earliest Navy vessels, federal funds have helped strengthen Maine’s economy and create opportunity for working families.

Federal highway funds have built thousands of miles of roads and bridges we use every day. Federal investments make possible clean water, electricity for rural residents and Internet access.

Federal dollars support education, retirement security and health care, particularly for Mainers who are older, low-income, disabled or veterans. In fact, federal funds currently pay for more than one-third of Maine’s state budget.

Maine voters consistently approve transportation and other infrastructure bond issues because they know that the federal government will match or exceed each dollar the state spends.

The Maine Center for Economic Policy’s analysis, based on bond issues in recent years, has shown that the federal match for each state transportation and wastewater treatment bond dollar has returned $1.76 and $4.57, respectively.

By comparison, accepting federal ACA funds presents an exceptionally lucrative chance to leverage federal dollars. Every dollar Maine spends to expand health care will bring back a whopping $62 in federal ACA funds. Stated differently, the state’s share of the cost of increasing health coverage is only 1.6 percent of the total cost during the first three years.

These new federal funds will flow throughout Maine, yielding significant economic impact in every county. They will pay hospitals, physicians, pharmacists, mental health counselors and other health care providers.

Health care businesses will spend these funds to purchase materials and equipment and to pay the salaries of doctors, nurses, health aides, administrative personnel and others.

This economic boon is especially important as Maine continues to lag behind the rest of the Northeast and most of the nation in our slow recovery from the Great Recession. Maine has regained, on net, only 9,900 of the 29,100 payroll jobs lost as a result of that economic downturn.

Accepting ACA funds will not change these trends overnight, but it will significantly enhance Maine’s recovery prospects. Refusing the funds will put Maine at an economic disadvantage with states that accept them.

Maine has a lot more to lose. Hospitals and those who do have insurance will continue to pick up the costs for the uninsured. Working people will still be unable to visit their family doctor and live in fear that an illness or accident will result in their financial ruin.

Accepting federal ACA funds is one of the most, if not the most, important steps our leaders can take to extend affordable health care to tens of thousands of hardworking Mainers, deliver thousands of much-needed jobs and give our struggling economy a much-needed lift.

It is a once-in-a-generation bargain Maine just cannot afford to pass up.

— Special to the Press Herald

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