Report says MaineCare could save $1 billion

Maine’s Medicaid program not only is among the most heavily enrolled in the nation; it spends nearly twice as much per enrollee as the national average, according to a new report from a public policy group.

The report envisions strategies for shaving $1 billion off the annual budget for MaineCare, as the program is called in Maine, but on Tuesday a key lawmaker called the projections unrealistic.

The Maine Heritage Policy Center, based in Portland, released the first portion of its five-part report, “Medicaid Watch,” at a legislative breakfast Tuesday morning at the State Office Building in Augusta.

The report is aimed at helping lawmakers understand what drives spending in MaineCare. The first portion offers an overview of MaineCare enrollment and spending in comparison to national averages and promises $1 billion annually in savings by moving Maine spending closer to the average.

With lobbyists, policymakers and legislators wrangling in Augusta over the Medicaid budget, it’s important to put MaineCare in context, according to the report’s author, Tarren Bragdon, director of health reform initiatives for the conservative think tank.

“Policymakers need to see how our spending compares to other states,” Bragdon said Tuesday in a telephone interview. “Then they can ask if we’re spending appropriately and if we’re getting the health care outcomes to justify that spending.”

According to the report, expanded income guidelines for MaineCare eligibility have ramped up enrollments over the past few years so that Maine is now second-highest in the nation, behind only Washington, D.C., in terms of the percentage of residents enrolled. The average Medicaid enrollment among all states is one in seven, but in Maine the program covers one in every five people under the age of 65.

Maine also ranks second, again behind the nation’s capital, in per-person Medicaid spending: $8,050 in Maine versus the $4,236 national average, a difference of 90 percent.

Bragdon said it’s possible to cut spending without changing eligibility guidelines or cutting benefits, primarily by managing services more carefully, reducing payments to providers in keeping with national practices, and tracking results to ensure quality.

Rep. Jeremy Fischer, D-Presque Isle, said the $1 billion savings figure is unreasonable, given that it would essentially halve the program’s $2.4 billion budget. Fischer is the House chairman of the Legislature’s Appropriations and Financial Affairs Committee, currently embroiled in heated debates over proposed changes to the MaineCare budget.

Without providers, services can’t be delivered, Fischer said, “and, clearly, if you cut the budget by $1 billion, most of our providers will go out of business.”

Fischer noted that Gov. John Baldacci’s biennial budget calls for some changes in keeping with Bragdon’s proposals, including switching mental health services to a managed care model and standardizing payments to providers.

Bragdon’s study will provide “decent data” for lawmakers and others, Fischer said, and applying cost-saving strategies proposed for mental health services to other services could result in even greater savings than the governor’s budget proposes.

Brenda Harvey, commissioner of the Maine Department of Health and Human Services, said she had questions about the methodology of Bragdon’s report and would reserve comment until she had time to study it.

Subsequent portions of the Medicaid Watch study will be released over the next two weeks, Bragdon said, and will address the details of services provided to Maine’s children, adults, elderly and disabled.

The report is available on the Web site of the Maine Heritage Policy Center, www.mainepolicy.org.