March 24, 2013

Our View: Medicaid expansion already a sweet deal

Maine's interests would be better served by expanding MaineCare, not by standing pat.

Maine is one of several states pushing the federal government for a sweeter deal under the Affordable Care Act.

The current offer calls for the federal government to pay 100 percent of the cost of insuring people with incomes up to 138 percent of poverty for three years and then ratchet down to no less than 90 percent for the next seven years.

In a letter to federal regulators, Maine's commissioner of health and human services countered with this: Maine would go ahead and expand its Medicaid program (called MaineCare here) if Washington would guarantee 100 percent financing for all 10 years and give the state a waiver from federal regulations that would give Maine more flexibility to design its program.

That's a good opening offer, but it should not be the end of the discussion. Even without the enhancements, the feds are offering a pretty sweet deal that is much better than what Maine gets by standing pat.

According to the right-leaning Heritage Foundation, Maine would be one of 10 states that could insure more people and spend less on Medicaid over the next 10 years if it expands.

Heritage reported that Maine would save $690 million over the next decade, even if it pays 10 percent of the costs in the last years of the agreement. This is possible because of the way the state and federal governments share costs under the two plans.

Maine already expanded Medicaid eligibility and already covers many of the people who'd be included in the expansion, paying 40 percent of the costs.

If Maine expanded its program under the ACA, the state would pay no more than 10 percent of the costs for the same people.

Maine DHHS Commissioner Mary Mayhew is right to push for more flexibility to design a program that controls costs. MaineCare's cost overruns are a reflection of the high cost of health care generally in Maine, and covering the uninsured alone won't be enough to change that.

But that kind of reform should be pursued whether or not Maine gets the waiver as part of its Medicaid expansion. If the federal government says no to the waiver, how would we be better off -- either from a cost containment or a public health perspective -- by rejecting the offer.

Maine moved in the right direction with Mayhew's letter to the U.S. Department of Health and Human Services. She is right to get the best deal possible, but she should be sure to get a deal in the end, and what's already on the table looks pretty good.

 

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