May 10, 2013

Michael Cuzzi: Repaying hospitals and expanding Medicaid work together

The Democrats hand the governor and legislative Republicans a win-win that they should accept.

When good public policy becomes embroiled in partisan politics, it's usually the people who suffer. That's exactly what's happening to the possibility of Medicaid expansion in Augusta, where the health care of 70,000 low-income residents hangs in the balance.

The rhetoric at the State House on Medicaid is as heated and unyielding as any this legislative session, despite the fact that the various parties actually agree on considerably more than they disagree.

Let's review.

The governor and legislative Republicans made repaying the state's nearly $500 million hospital debt their top legislative priority this session. Democrats, somewhat haltingly at first, eventually got on board and now even support the governor's preferred repayment mechanism: issuing a revenue bond backed by future liquor sales.

And cash-strapped hospitals, eager to finally pocket the money they are rightfully owed, support the plan.

So far so good.

The sticking point is the recent Democratic linkage of hospital repayment with Medicaid expansion. The governor and legislative Republicans claim the two issues should be separate. Democrats believe it is necessary to link them to more comprehensively address some of the major cost drivers in our health care system.

As before, there is more agreement here than meets the eye.

The governor has said he is open to participating in Medicaid expansion if he's able to negotiate the "best deal for Mainers" with the federal government. It's unclear what that means or if there is a legitimate opportunity for Gov. LePage to strike a deal, but at least it appears he is guardedly open to expansion.

External developments may conspire to push him further along.

First, the federal government indicated recently that it would give Maine "flexibility" in how it implements expansion and confirmed Maine would not be financially penalized for previously expanding Medicaid coverage to 10,500 low-income adults.

Second, other Republican governors in states like Ohio, Florida and Arizona have bucked deeply conservative political bases and opted to participate. Gov. Rick Scott of Florida described expansion as a "compassionate, common-sense step forward."

Third, the stalwart conservative think tank, Heritage Foundation, estimated Maine could save $690 million between 2014 and 2022 if it expands Medicaid coverage.

Fourth, Maine's hospitals -- perhaps LePage's most powerful political ally -- publicly support Medicaid expansion, recognizing that it creates a new pool of 70,000 insured patients that can help address declining patient volumes, stem the demand for charity care and reduce costs to patients with private insurance.

Collectively, these produce powerful political cover for LePage's own embrace of expansion.

So what's the problem?

The governor, legislative Republicans and the Maine Hospital Association are stuck on the linkage of Medicaid expansion with repaying the hospital debt. They want a "clean" vote on hospital repayment with no strings attached.

That would be fine in a vacuum. But politics and legislating aren't transacted in a vacuum. And, what's more, from the moment the governor announced it, the hospital repayment plan was never a "clean" piece of legislation. Originally, LePage coupled his repayment plan with the release of $105 million in wholly unrelated voter-approved bonds, presumably as an enticement for Democratic support.

Now, the governor and legislative Republicans ironically and indignantly chafe as Democrats couple the repayment proposal with something entirely germane to the economic health and vitality of our hospitals and which the hospitals themselves support!

Politically speaking, Democrats have the upper hand. With majorities in the House and Senate, they can, if necessary, force their preferred legislation through both chambers and deliver it to the governor's desk.

The governor then must decide if he's going to sign the "coupled" bill or veto legislation that actually accomplishes his No. 1 policy priority -- repaying the hospitals. If he vetoes it, he delivers a double blow to the hospitals and simultaneously denies 70,000 Mainers access to quality health care.

Conveniently, however, the Democrats' proposal gives the governor a crafty political "out." If he chooses to sign the bill, he can claim credit for "winning" on hospital repayment while also claiming "liberal elitists" forced him to expand Medicaid, saving face with his political base.

The Democrats have put forward a deal that allows everyone to walk away with a political, policy and economic victory. The governor and legislative Republicans would be wise to take it.

Michael Cuzzi is a former campaign aide to President Obama, Secretary of State John Kerry and former U.S. Rep. Tom Allen. He manages the Portland office of VOX Global, a strategic communications and public affairs firm. He can be reached at:

mjcuzzi@gmail.com

Twitter: @CuzziMJ

 

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