July 25, 2021

Paying our debts to Maine hospitals

For three administrations – two under an independent and one under a Republican

– state government refused to pay hospitals back payments that were due to them. That was bad for local hospitals, all of which are non-profit and many of which are small community-supported organizations and the life center of health care for their regions.

It was also bad for patients, who rely on hospitals’ continued coverage of Medicaid and Medicare patients. And the trickle-down impact of unpaid debts to hospitals goes even further, affecting the premiums we all pay for health insurance as hospitals have to increase charges to cover unpaid debts and charity care.

Gov. John Baldacci inherited 11 years of unpaid debts on his first day in office. With a structural gap of $1.2 billion, demands for increased school funding, and many other legitimate and pressing needs competing for scant dollars, Gov. Baldacci might have been forgiven if he had let the unpaid debts go unpaid a little longer.

Instead of taking the easy route, the governor showed his typical unrelenting commitment to fiscal responsibility by putting the state on a path to pay off these debts. As of this week, Maine has paid hospitals for all outstanding debts owed from 1992 to 2004. We have moved from 11 years in arrears to less than two years.

Last week, the governor announced an agreement with the Maine Hospital Association to become current on the rest of the payments owed to hospitals. Gov. Baldacci has done most of this rather quietly, as is his fashion.

It is the time of year for political accusations, and so it is not a surprise to hear this newest one – that this settlement could have been accomplished long ago, and is only happening now because of upcoming elections. The Republicans, who might have chosen to applaud the payoff of 11 years of debt in such a short time, instead have complained that had they had their way, hospitals would have been paid off sooner.

It is true that a large portion of the remaining hospital debt could have been paid off sooner – Democrats proposed in May of this year that we allocate $15 million from the general fund to pay down much of the debt. Had we done so, another $30 million of matching federal money would have combined to reduce the debt by $45 million. Republicans refused to go along and opposed the much-needed issuing of transportation bonds.

It is also true that earlier budgets might have helped to solve the hospital debt problem. Since 1988, when Republican John McKernan became governor, only two budgets have passed without bipartisan support. In no case did Republicans ever demand that the state pay hospitals for the debts incurred by the McKernan and King administrations.

The governor could have let this slide until after the election. The governor could have put a halt to the negotiations that have been ongoing for a year. We could demand that the governor stop governing every election year. But failing to move forward is not an option. Just because we are in an election year, does not mean we stop governing.

Despite Republican efforts to block previous efforts to boost payments to hospitals, Gov. Baldacci and the Maine Hospital Association did not stop in their negotiations, and they have done a great service for the integrity of the Medicaid system in Maine, and have ensured continued access to quality health care for all Mainers.

It is interesting that Republicans are complaining at the same time that hospitals have negotiated in good faith and agreed to the current plan for settling debts.

Election year or not, the agreement to pay off the hospital debt is the right thing to do, demonstrates fiscal responsibility, and moves Maine forward.

John Richardson is Speaker of the Maine House of Representatives and represents House District 63, part of Brunswick. Hannah Pingree is a state representative from North Haven and is House co-chair of the Health

and Human Services Committee.

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