Politics

January 9, 2013

Feds approve LePage cuts to health care for low-income Mainers

The federal government's split decision preserves health coverage for some, but will reduce or eliminate coverage for up to 20,000 low-income Mainers.

AUGUSTA — More than 20,000 low-income Mainers will lose health care coverage on March 1 because of Medicaid cuts sought by Gov. Paul LePage and approved this week by the federal government.

Today's poll: Health insurance cuts

Do you agree with the federal government’s ruling on Gov. LePage’s efforts to cut some health-insurance programs for low-income Mainers?

Yes

No, federal government was too harsh

No, federal government was too lenient

View Results

click image to enlarge

Mary Mayhew, Gov. Paul LePage's Dept. of Health and Human Services commissioner.

Staff photo by Joe Phelan

click image to enlarge

Health and Human Services Secretary Kathleen Sebelius, with President Barack Obama, during a February news conference in Washington.

AP photo

The U.S. Department of Health and Human Services issued a split decision on the LePage administration’s plan to eliminate health insurance for about 37,000 Medicaid recipients and save more than $20 million in state spending.

In letters sent Monday to Maine’s Health and Human Services Commissioner Mary Mayhew, the Obama administration approved a request to eliminate coverage for 12,592 working parents whose earnings are 133 percent to 200 percent of the federal poverty level – $30,657 to $46,100 a year for a family of four.

It also allowed the state to deny or reduce Medicaid health care and prescription drug coverage for 8,250 elderly and disabled adults in the Medicare Savings Plan. About 2,600 of those people will lose all coverage under the Medicare Savings Plan and Drugs for the Elderly programs, Mayhew said.

The federal waivers are considered unusual, if not unprecedented.

Federal officials rejected Mayhew’s request to cut Medicaid insurance for about 6,848 low-income 19- and 20-year-old Mainers.

They also turned down a request to cut health insurance for about 14,978 parents whose earnings are 100 percent to 133 percent of the federal poverty level – $23,050 to $30,657 per year for a family of four.

Of the $23 million in Medicaid cuts initially sought by the LePage administration, the approved federal waivers will save $4.5 million in the last four months of the fiscal year that ends June 30, according to the Legislature’s nonpartisan Office of Fiscal and Program Review.

The LePage administration asked DHHS Secretary Kathleen Sebelius for federal approval to help balance the two-year budget ending June 30. Lawmakers still face an estimated $95.5 million funding gap for the state’s Medicaid program, MaineCare.

Mayhew said Tuesday that she was glad that the federal government gave Maine some added flexibility to manage rising Medicaid costs but the state needs greater independence to make sure the program serves its core mission.

She noted that 700 Mainers with developmental and intellectual disabilities are on a waiting list for coverage.

“I don’t want to minimize the difficulty of this decision, but these cuts were legislatively authorized policy changes that were presented in the budget that was submitted by the governor,” Mayhew said. “We have to look comprehensively at managing the size and scope of the state’s Medicaid program to get it on a stable and sustainable path.”

The Medicaid reductions were approved by the Legislature in the spring to bridge a state budget shortfall. Opponents argued that some of the cuts were illegal under a provision of the Affordable Care Act that sets minimum coverage levels for Medicaid.

The Legislature, on a party-line vote with Republicans in the majority, used the unapproved cuts to plan savings in a supplemental budget, initiating a protracted public dispute between LePage and the Obama administration over whether the cuts should be allowed.

Two-thirds of the Legislature supported the proposal to eliminate coverage for parents earning between 133 percent and 200 percent of the federal poverty level in separate budget bill.

Because the Affordable Care Act is only a few years old, states and the federal DHHS are essentially plowing new ground.

To date, no states have been granted Medicaid coverage waivers from the Affordable Care Act. Three other states – Wisconsin, Illinois and Hawaii – would be eligible for the limited exceptions granted to Maine on Monday because they have actual or projected budget deficits, a DHHS official in Washington confirmed Tuesday.

(Continued on page 2)

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Today's poll: Health insurance cuts

Do you agree with the federal government’s ruling on Gov. LePage’s efforts to cut some health-insurance programs for low-income Mainers?

Yes

No, federal government was too harsh

No, federal government was too lenient

View Results