Delegation: Swift Medicaid help unlikely

AUGUSTA – Gov. John Baldacci’s plea to the state’s congressional delegation to work for changes in the Medicaid funding formula has been received sympathetically, but no one believes such a reform is likely in time to help the state with its budget woes.

“The state budget process is on a different schedule than any federal action,” U.S. Sen. Olympia Snowe said last week. “Generally any major legislative proposal results in an end-of-the-year decision in Washington; things rarely move swiftly.”

Snowe expects Medicaid will be a major issue this session of Congress, with President Bush seeking to reduce the rapidly increasing cost of the program that provides health care to the poor and disabled. Snowe, a Republican, serves on the Senate Finance Committee, which has jurisdiction over Medicaid proposals.

In a Jan. 7 letter to all four members of the delegation, the governor asked for help in getting a change in the Federal Medical Assistance Percentage, or FMAP, rate formula. Maine was notified last November that the state rate would change by about 2 percent so that the state must pay more of the cost of the program.

“This is going to cost about $80 million, so I am asking they seek a change in the formula that is more reflective of today,” Baldacci said in an interview. “This hasn’t been looked at since 1965.”

The Medicaid program has been growing faster than any other major program and is over a fifth of the total proposed state budget of $5.7 billion.

The current formula is based solely on a state’s per-capita income, averaged over three years. Under the formula, Maine’s increasing per-capita income, which the governor acknowledges is good news, will result in the state getting fewer federal dollars.

“I think we will be able to persuade some republicans in Congress that the president is going the wrong way on Medicaid,” U.S. Rep. Tom Allen said last week. “But I don’t think anything like this can be done swiftly.”

Allen, a Democrat who is a member of the House Energy and Commerce Committee that has jurisdiction over Medicaid legislation, said any attempt to rewrite the Medicaid formula will be made more difficult by the expected proposal of President Bush to convert the program to a block grant.

“If the federal government spends less on Medicaid, which it would under the block grant approach, states will either have to spend more or they will have to be pushing the elderly out of nursing homes,” he said.

U.S. Sen. Susan Collins also opposes the block grant approach. She said last week that the program is a “safety net,” and it was for that reason she supported an effort in 2003 that directed an additional $10 billion to the states for the program.

“I have consistently opposed any proposal to cap federal spending or utilize block grants for the Medicaid program,” the Republican senator said. “At a time when many states are raising taxes in order to meet their state Medicaid obligation, it would be devastating if the federal government restricted its payments.”

Collins said it would be a priority for her in the new Congress to make sure the Medicaid program is not reduced.

U.S. Rep. Michael Michaud said last week his staff is looking at ways to “creatively” change the Medicaid formula so it would benefit Maine. As a former state lawmaker, he knows how important the program is to the state, the Democrat said.

“When I was chair of the Appropriations Committee, we sent letters to the congressional delegation at that time urging them to seeking greater funds for the states,” he said. “I will urge my colleagues to move swiftly on any changes, but yes, Congress tends to move slowly, and it’s not likely we will act before the Legislature has to act on the state budget.”

The issue of Medicaid funding is affecting many states. A group of governors will meet Jan. 19 in Washington to discuss the problems plaguing the Medicaid program. In a letter to congressional leadership, the co-chairmen of the National Governors Association, Gov. Mark Warner, D-Va., and Gov. Mike Huckabee, R-Ark., said that governors acknowledge there need to be changes in the program.

“States, over the last four years, have experienced large caseload increases of approximately 33 percent,” they wrote. “Far more costly to the states are the impacts of long term care and the dual eligible population.”

Medicaid now provides half of all the dollars paid for long-term care in the nation, and that covers 70 percent of all the people in nursing homes. In addition, 42 percent of all Medicaid expenditures are spent on seniors who are covered by Medicare.

“These issues are complex and are crucial, “Snowe said, “They are not going to be solved quickly.”

If the delegation is correct, Baldacci needs to fill a hole in his budget of about $80 million.

When asked what he would do if help from Congress is not forthcoming, the governor said Finance Commissioner Rebecca Wyke is working on a plan. He did not disclose what that plan might include.