Editor’s Note: Health and other services to low-income people in Maine are threatened by Gov. Angus King’s proposed Medicaid cuts to balance the state’s budget. This three-part series focuses on individuals who benefit from one or more of the threatened programs.

Second of three stories

GUILFORD – Merinda Braley is reminded of the importance of Medicaid in her life every time she opens the kitchen cupboard in her modest mobile home located just off Route 15 in this blue-collar Piscataquis County town.

Lined up on a shelf are half a dozen medications in bottles of various sizes. One she takes in the wake of her recent hysterectomy. The rest are for her husband’s heart condition.

“If it wasn’t for Medicaid, I don’t know what would happen to us,” said Braley, a 30-year-old mother of two young girls. “All these medications alone, we could never afford.”

Like many families struggling to make ends meet in rural Maine, the Braleys have no health insurance. Charles Braley, 35, works as a janitor at the local Ames department store. Merinda worked there, too, until last October, when she was laid off.

Medicaid, the state-funded program augmented by federal money that provides health care coverage to approximately 190,000 low-income Mainers, was recently targeted for cuts in an effort to balance the state budget. The threat of those cuts may have been lessened with news the budget shortfall is not as bad as originally thought, but the idea such cuts are even contemplated frightens Braley, who relies on nearby Mayo Regional Hospital in Dover-Foxcroft and its outreach services for her family’s health care.

“It’s very important to us. If they cut [Medicaid] I don’t know how we’ll get by,” Braley said, folding her hands in her lap during a recent conversation at her kitchen table.

Braley doesn’t have to worry about having her health care cut off, even if the state eventually reduces Medicaid reimbursements, according to Mayo CEO Ralph Gabarro. “As a not-for-profit community hospital, we’ll care for anyone irrespective of financial means,” he said.

What Gabarro worries about if the Medicaid cuts ever come to pass is what he terms the “ripple effect” on the economy and, ultimately, on rural hospitals.

“Medicaid reductions cause cost-shifting to the commercial [insurance] programs, which increases health insurance premiums, which exacerbates health care concerns. It’s an interrelated reality,” said Gabarro, noting that eventually everyone is affected. Carry the logic out far enough, he said, and companies drop health insurance altogether, or go out of business, hurting the economy and creating more low-income people on Medicaid who end up in hospital emergency rooms.

For rural hospitals, which generally treat a larger percentage of low-income patients than larger, urban hospitals, Medicaid reimbursement is vital. Gabarro estimates 10 percent of Mayo’s revenue comes from Medicaid. He points out, however, that Medicaid reimbursement generally covers about 79 cents on the dollar of the hospital’s actual expenses.

“With Medicaid reimbursement, we’re already operating at a loss,” he said. Gabarro also points out that Medicaid is a program funded one-third by the state and two-thirds by the federal government. Thus, for every dollar the state cuts back the Medicaid program, it also is turning away $2 of federal matching funds.

Licensed for 46 beds, Mayo’s daily census averages 16 or 17 patients, enough to keep the facility busy and 300 workers employed. The hospital also operates clinics in several neighboring communities.

Other rural hospitals aren’t as busy, which puts them on shakier financial ground even before Medicaid cuts are contemplated.

Millinocket Regional Hospital, a 42-bed facility, recently eliminated the equivalent of 15 full-time jobs from its staff of 210 and announced it would close its health center in Brownville. Part of the reason for the reduction was the discrepancy between Medicaid and Medicare (federal) reimbursement and the hospital’s actual expenses, according to CEO Richard Waller. Couple that discrepancy with declining patient admissions – MRH has recently averaged a daily census of eight or nine patients – and cuts become inevitable.

“Any reduction in Medicaid reimbursement would only make things more difficult for rural hospitals,” said Waller.

In the face of such pressures, some rural hospitals may change their federal licensing designation from Acute Care to Critical Access, making them eligible for higher Medicare (federal) reimbursement. Such a change in designation often means a reduction in licensed beds and some services.

Waller said MRH is currently studying the possibility of changing its designation to Critical Access.

Gabarro said, thankfully, Mayo does not need to consider such a change.

“In Piscataquis County we’re fortunate to have a pretty solid manufacturing base with companies like Guilford of Maine, Moosehead Furniture, and Pride Manufacturing. Even though we’re poor, we don’t have quite as high a percentage of Medicaid patients as some other areas,” he said.

The Braleys are thankful to have Mayo and its related facilities close by. But they are more thankful for Medicaid.

In 1995, their youngest daughter, Mikayla, was diagnosed with Raynaud’s phenomenon, a rare circulatory affliction characterized by discoloration of the hands and feet.

“We ended up going to a specialist in Bangor, who recommended that we take her to Boston,” Merinda recalled. “The specialist in Boston diagnosed her with Raynaud’s phenomenon. There’s nothing they can really do for it.”

Medicaid covered the doctors visits.

Two years ago, Merinda began experiencing abdominal pains that would eventually lead to a diagnosis of endometriosis and, last November, removal of her uterus. She also ended up having her gall bladder removed during the same surgical session, which was performed at Mayo. The surgical procedures alone had a price tag of more than $11,000.

Medicaid covered them.

A little over a year ago, Charles had a heart attack. He has been taking five medications ever since. Merinda doesn’t know the price of all the drugs, but knows they are very expensive.

Both she and Charles see their doctors every three months.

Medicaid covers it all.

Tomorrow: Medicaid helps former patient with counseling, transportation and loans.