Time against McKernan proposal to strip 6,000 nursing home beds

AUGUSTA — Time seemed to be running out Sunday for the McKernan administration’s attempt to gain additional revenue by eliminating 6,000 nursing home beds for low-income elderly Maine residents.

H. Sawin Millet, the governor’s chief finance officer, told members of the Legislature’s Appropriations Committee Sunday afternoon that he could not guarantee the administration’s request for a federal waiver would be answered within the month.

Members of the governor’s staff told the committee last Tuesday that they should receive an answer to the proposal this week. The Legislature is scheduled to adjourn on June 16 and the committee is charged with presenting a new budget before the current fiscal year expires on June 30.

Regardless of the response from a U.S. Department of Health and Human Services review board, the 116th Legislature is not apt to go along with the plan that could potentially create a new class of homelessness in the state.

“I don’t think that this is something the Maine Legislature is going to agree to,” Rep. Sharon A. Treat, D-Gardiner, said Sunday. “There appears to be pretty broad bipartisan opposition to this plan and my sense is that most legislators are fairly outraged by the proposal and don’t agree with it.”

As part of a $98.7 million spending reduction package under the state Department of Human Resources long-term care account, Gov. John R. McKernan has predicted $42.1 million in savings obtained through a three-year demonstration project affecting eligibility for federal benefits. The study would examine the effect of terminating eligibility for those considered “medically needy” whose incomes exceed $1,302 each month. Medicaid recipients classified as “categorically needy,” with incomes ranging between $434 and $1,302 each month, would also be denied nursing home benefits.

Because the governor’s plan affects only those individuals falling into the designated income levels after July 1 (the beginning of the state fiscal year), 600 people matching the income profile and currently receiving nursing home care would not be included in the demonstration project. The equity provisions of Medicaid policy require McKernan to obtain a waiver from the federal human services department in order to initiate the study.

Treat and Sen. Judy A. Paradis, D-Frenchville, co-chairwomen of the Legislature’s Human Resources Committee, oppose the demonstration project as an exercise that would have “a devastating impact on the poor elderly in Maine.”

“I really find it quite callous,” Treat said. “What this demonstration would actually do is explore what happens to people when they’re denied access to nursing homes. So you get to find out how many die and how many are driven into homelessness — that’s what it would be.”

To the governor’s dismay, fellow Republican and Bangor native U.S. Sen. William S. Cohen has sided with opponents of the Medicaid eligibility demonstration program, saying last week that the plan prompted “hundreds of complaints” to his office.

“While we want states to be laboratories for innovative program and financing ideas, these demonstrations should not come at the expense of the population the program is designed to serve, particularly when it appears there is no additional safety net in place within the state to provide alternative care to those who would be denied eligibility under the proposal,” Cohen wrote in a letter to U.S. Health and Human Services Secretary Donna Shalala.

Cohen and Treat expressed serious reservations over the likelihood of McKernan obtaining the waiver. The two income categories targeted by the administration are designated as “optional” under Medicaid guidelines, but 32 other states already pay the balance for nursing home care which can exceed $3,000 each month. Cohen said the federal government generally grants waivers for demonstration projects on the study’s potential for providing positive reforms that can be emulated by other states.

“In the case of Maine’s waiver request, most of what would be learned would come from studying the adverse impact of lowering eligibility criteria,” he said.

“In a way you can look at the waiver and say it’s making the plan a little bit better because it’s not kicking 600 people who are in their nursing homes right now out into the streets,” Treat said. “But if they do get the waiver, it enables them to stop the 6,000 people from getting any services at state expense. At the same time, there’s zero money going into community home-based care.”

Existing home-based care programs operate on extremely tight budgets and are unable to extend services beyond current levels. While unarguably less expensive than nursing home beds provided under Medicaid, home-based care is frequently beyond the financial means of elderly residents living on less than $500 a month.

“Maybe they could pay for something — but not much,” Treat said. “Their rent alone is going to take up most of their income. These are people who probably have to get general assistance just to live.”