Legislators question Medicaid cuts

AUGUSTA – Proposed cuts to state Medicaid funding that would turn away tens of millions of federal matching dollars from Maine’s health care system were greeted with resistance by some legislators Tuesday.

Members of the Appropriations and Health and Human Services committees questioned the true cost of Gov. Angus King’s plan to balance the state’s budget by cutting Medicaid at a time when health care is in crisis, especially among the poor who benefit from the program.

As the committees were hearing dire stories about the impact, House Speaker Michael Saxl, D-Portland, held a press conference down the hall, announcing he won’t go along with King’s plan.

“We are here to say that we will not balance the state’s budget on the backs of those least able to afford it,” Saxl said.

Afterward, Saxl said he’d like to see the whole biennial budget reopened in a search for ways to cover a projected $248 million shortfall.

One idea would be to delay the demolition of the old state prison in Thomaston, he said.

Rep. Christopher O’Neill, D-Saco, chairman of the Banking and Insurance Committee, which deals with health insurance, said the loss of federal Medicaid funding would turn a crisis into a “calamity.”

Tuesday was the first of three days of Appropriations Committee hearings on the details of the proposed Medicaid cuts. Lawmakers looked at the impact on hospitals, doctors, nursing homes and other entities.

As each item was discussed, Department of Human Services Commissioner Kevin Concannon usually was the sole voice recommending the proposal, which would turn away $2 of federal money for every $1 not spent by the state.

“I guess what we are saying is that we can’t afford the federal money,” Rep. Joseph Brannigan, D-Portland, said to Concannon. “We can’t afford to have the federal money come to Maine.”

“Basically, we can’t afford the state share,” Concannon said.

But others wanted to know what the consequences of the cuts would mean economically. For instance, the proposal would eliminate $15.6 million in reimbursements to hospitals of which just $5 million would be the state’s share.

Rep. Thomas Kane, D-Saco, a chairman of the Health and Human Services Committee, asked Concannon if a study had been done to gauge the economic impact of the cut in an industry employing 25,000 Mainers.

Concannon said he was unaware of any such study.

Steven Michaud, president of the Maine Hospital Association, said the cuts would “substantially aggravate cost shifting in this state.” To make up the funding loss for care, more would be charged to those with private insurance, which could drive up already high insurance rates, he said.

“I don’t think anyone could defend these as wise,” he said.

Sen. Jill Goldthwait, an independent from Bar Harbor and an Appropriations Committee chairwoman, said the hospital cuts were really reducing the cost of increases, not scaling back services. She pointed out that health care costs have been steadily rising.

Michaud said the rising use of medical services and a host of other national price drivers were to blame for the increases, not hospitals.

“If you really want to go after the money you have to go after keeping sick people out of the system [for as long as possible],” Michaud said.

Richard Erb, president and CEO of the Maine Healthcare Association, complained nursing home funding reductions of about $13.1 million in federal funds from savings of $6.6 million in state funds would cause harm. They come on top of 10 years of state underfunding, he said.

“I don’t understand how the department can justify surrendering these funds,” he said.

One of the few bright spots for critics was Concannon’s proposal to reinstate podiatrist, chiropractic and occupational therapy benefits under Medicaid. They could be funded because it was discovered the price for demolition of the prison in Thomaston will be $1 million less than anticipated, he said.

Although health care providers and advocates continued to denounce the proposals during the day, they also said they understood the budget predicament. Appropriations Committee members said they were in an uncomfortable position as well.

“It’s not a pleasure to serve here right now,” Brannigan said. “We’ll still run again – probably.”