Mal Leary’s story, “Study: Maine fares well in gaining federal grants” (BDN, Dec. 17) failed to point out that Medicaid funds are formula based. Funding is distributed to states to reimburse their medical assistance costs based on the Medicaid reimbursement formula. The federal share for reimbursement is determined based on an initial reimbursement rate of 55 percent, but this 55 percent level is adjusted up or down using the ratio of a state’s per-capita income to the U.S. per-capita income, squared.

States with high per-capita incomes relative to the U.S. level receive reimbursement at a rate below 55 percent, to a minimum federal share of 50 percent, and states with low per-capita incomes relative to the U.S. level receive reimbursement at a rate above 55 percent to a maximum of 83 percent. (Source: U.S. General Services Administration.)

Maine receives as much as it does because of our relatively low income, as state economist Laurie LaChance points out, because Maine takes full advantage of all the options available. This still hasn’t helped hospitals and other health care providers get full reimbursement for their costs of providing services, a fact well documented in the Blue Ribbon Commission’s report on health care in Maine.

A strong case is made in the report and comments that federal and state government underpayment of up to 70 percent in some instances (i.e., 30 cents received to a dollar billed) is the major cause of private insurer overload as providers shift unpaid costs to the private insurer and the individual.

The Northeast-Midwest Guide to Federal Formula Grant Programs cited by Leary is notable for one other startling fact: Maine’s Children Health Insurance Program is grossly underfunded in comparison to other states. Many states, including nearly the entire West Coast receive about twice as much as Maine does. Maine’s per capita amount of $10.55 is dwarfed by New Mexico’s $27.91 and California’s $20.81. Indeed, the entire West Coast is funded at $17.91 on a per capita basis.

Since child health insurance is such a high priority, voters should request that Sen. Susan Collins, who sits on the board of advisers to the Northeast-Midwest Institute, investigate this huge disparity in funding of children’s health insurance and ask her whether this has been one of the reasons why there are so many uninsured children in Maine.

Frank J. Heller, MPA

Public policy analyst

Brunswick