In 2002 Maine tried Medicaid Expansion and it was a disaster.
Medicaid Expansion caused a massive hospital debt, medical job cuts, and a state budget crisis.
It didn’t work.
We can’t do it again.
Please scroll down to see the many reasons why Question 2 is bad for Maine.
Maine’s last Medicaid expansion experiment failed badly. We ended up with a massive $750 million Medicaid debt to Maine hospitals. Hospitals cut hundreds of jobs. Small, rural hospitals were financially hit hard. The Maine Hospital Association reported in their Hospital Debt Fact Sheet, that in at least one case, a hospital closed its maternity ward due to the Medicaid debt. Medical care was harmed as advances stopped.
Maine’s last Medicaid expansion caused a state budget crisis and chaos. The hospital debt and huge cost overruns exploded the budget. For years the Maine State Legislature and both Governors Baldacci and LePage struggled with the debt. It will happen again. A Kaiser Foundation linked report in 2004 noted that Maine’s Medicaid expansion exploded 53% beyond its expectations as working age adults, without children, who were not disabled rushed to take free taxpayer-funded welfare benefits. The report said, “Maine is experiencing budget deficits…” A national Heritage Foundation report at the time said Maine’s “Medicaid expansion is even more unsustainable given that (Maine) Medicaid is already consuming almost half of all new (state) spending…and Maine is already the second-highest-taxed state.” At the end, Maine Governor Paul LePage came up with a creative program to use state liquor sales to pay off the hospital debt and help end the crisis. It was a one-time fix that can’t be used again. Other states are also struggling with crisis as a results of Medicaid expansion. Public Radio news in West Virginia in a May 23, 2016 story titled: “Is Medicaid Expansion Contributing to WV Budget Crisis?” reported: “The cost to West Virginia next year will be almost a billion – 1 billion – dollars and every year that goes up.” In April of this year in Oregon, the state’s largest newspaper reported in a story titled, “Oregon’s economy soars yet state budget gap grows: here’s why,” that “Health care costs, largely due to Oregon’s Medicaid expansion, threw the state’s books off by $1 billion in the next budget cycle.” Modern Healthcare news reported, “Democratic lawmakers in Oregon are considering ending the state’s Medicaid expansion in an effort to address a $1.6 billion budget shortfall.” Question 2 will cause a massive state budget crisis in Maine again.
Maine State government spent a massive amount on the Medicaid expansion experiment in 2002 and promised a huge number of people would gain health coverage. It did not work. See the chart of the percentage with health coverage and without, according to the U.S. Census Bureau. The percentage of uninsured barely changed despite the 2002 Maine Medicaid expansion. And, if a person does have Medicaid coverage? The Centers for Disease Control and Prevention’s National Center for Health Statistics show that the percentage of physicians even accepting new Medicaid patients is below 70%. A 2017 analysis in Health Affairs found that, even when Medicaid patients get appointments, they experience significantly longer wait times for treatment. Studies by the U.S. government National Institutes of Health, detailed in Science Magazine, looking at Oregon’s Medicaid expansion, showed expansion produced no detectable changes in physical health, employment or earnings, and that expansion actually increased expensive emergency department visits by 40% in the first 15 months, including increases in visits for conditions that could have been treated less expensively elsewhere. Medicaid Expansion does not work.
Special interests pushing Medicaid expansion say it’s practically free, as federal taxpayers help cover some cost. That’s not true. Maine State taxpayers, right here in Maine, must pay up to $100 Million per year for welfare Medicaid expansion according to a detailed study from the Maine Heritage Policy Center. The Maine Legislature’s own budget analysis office says the cost is guaranteed to be at least $50+ million per year. This money must be paid by the State Legislature and comes directly from the State of Maine. Those pushing Question 2 won’t say where it will come from… but we know from history what will likely happen. None of it is good.
Our Senior Citizens are vulnerable and need our help. But, Medicaid Expansion has proven to take resources away from our nursing homes. When Maine last expanded Medicaid, politicians took state money for Medicaid expansion instead of properly funding Maine nursing homes. The Manager of the Caribou Rehab and Nursing Center, who managed the Visiting Nurses of Aroostook County, told the Bangor Daily News, “While Maine was underpaying its nursing homes …it simultaneously was providing thousands of young people with Medicaid health care services for free.” LifeCare Funding reported in 2010 – while Maine’s 2002 Medicaid expansion was still in place – that the state, facing a major budget crisis, proposed “10% rate cuts to nursing homes and residential care facilities.” The analysis showed “the cut to nursing homes is in the area of $26 million” despite the fact Maine was underfunding “its nursing homes by $25.5 million per year.” The Portland Press Herald included an interview with a nursing home faced with the budget cut. “’We take care of very ill people, people with dementia who can’t be at home,” said [Nursing home administrator Sara Sylvester] who runs the 90-bed Oak Grove Center in Waterville. She said the cut would force her to reduce staff. It happened in other states expanding Medicaid too. The Boston Globe reported that partially due to their implementation of Medicaid expansion, the Governor of New Hampshire proposed cutting $7 Million from nursing homes in 2015. In 2014, Rhode Island’s Providence Journal reported the Governor proposed cutting nursing homes to help close a $150 million budget hole while Medicaid, after expansion, consumed more than fifth of the state budget.
Big-pay Hospital CEOs ran up Maine’s Medicaid debt after the last expansion and expected Maine taxpayers to pay for it. It will happen again. Hospitals must provide charity care, but they do it in exchange for massive tax breaks. MedPageToday reports, “Nonprofit hospitals have higher profit margins than most for-profit hospitals— they pay no property tax, no federal or state income tax and no sales tax. Health Affairs found seven of the nation’s 10 most profitable hospitals were nonprofit… each earning more than $163 million from patients.” All Maine hospitals are non-profit and the CEOs personally benefit from no taxes. In the Portland Press Herald’s 2013 story, “Amid cuts, Maine hospitals still paying million dollar salaries,” they reported in 2013 that CEOs at Maine’s “nonprofit” hospitals earned an average salary of $339,620. A 2009 news report noted Sanford’s regional hospital CEO earned $398,000 per year in salary and benefits. The Herald’s report noted, “when bonuses and other compensation were added to the equation, the average pay for a top Maine hospital executive in 2011 was $480,328.” The Herald also reported in 2013, “Including one-time payments, the highest-paid executive at any hospital in Maine was Daniel Coffey, president and CEO of Acadia Hospital, in Bangor. In addition to his $356,359 salary, Coffey received retirement and other compensation totaling $1,696,795 for a total of $2,053,154.” And, the Hospital’s top lobbyist in Augusta, who is pushing for Medicaid expansion? He is earning as much as $886,607 per year as far back as 2011, as reported by HOSPITAL REVIEW.Hospitals are supposed to provide charity care but in return they pay no taxes. Maine taxpayers can’t afford to have another massive Medicaid Expansion bill forcing taxpayers to pay more to these hospitals under Question 2.
Expanding Medicaid in Maine to working age adults who were not disabled the last time put so much pressure on the state budget that the state put severely disabled people on waiting lists for services. State resources were spent on Medicaid expansion for working age adults, without disabilities, instead of those who were disabled. As a Heritage Foundation study pointed out, “The increased funding to this group means there is less money available for the original beneficiaries of Medicaid—elderly disabled, pregnant women, and children in poverty.” As Maine’s Lincoln County News reported in 2008 during the last Medicaid expansion, officials with Maine’s Department of Health and Human Services said “it needed to cut $50 million in services that directly affect the quality of life for adults with cognitive disabilities. The program in question provides help with living tasks ranging from shopping to bathing. Two-thirds of the funding comes from federal matching dollars.” Maine is still, years later, struggling to end the waitlists for those who truly need state services. Maine’s Health and Human Services Commissioner said in 2014, “there are thousands of elderly and disabled on waitlists for services to help support them in their homes and in their communities.” Expanding Medicaid under Question 2 will divert funds which are needed by Maine’s most vulnerable.
At a cost of up to $100 million per year, Medicaid expansion under Question 2 will throw Maine’s state budget into chaos and force the Legislature to come up with the funds. We saw what happened in the past when Maine tried Medicaid expansion: we had a massive debt at Maine hospitals, nursing homes faced lack of adequate funding, and Maine’s disabled were placed on waiting lists. If Medicaid is expanded again in Maine the Legislature will once again face massive funding pressures. Today, in Maine, overall education related funding makes up a very large share, 45%, of the overall budget in Maine. When budget cuts are made the largest pools of funding are almost automatically put on the target list. Inside Higher Ed magazine wrote in April of this year, “Medicaid expansion puts pressure on public higher ed (education) funding,” saying, “State legislators are essentially locked into spending on Medicaid [if the state expands]. So when costs in that program rise, lawmakers have to either raise revenue through taxes and fees or find money in their discretionary budgets to reallocate. Higher education represents one of the few big-ticket discretionary items from which they can draw.” They further noted, “A 2003 Brookings report found every new dollar in state Medicaid spending was related to a decline in higher education.” Another way to pay for Medicaid expansion is to raise sales taxes on everyone – including Maine’s senior citizens and families. Senior Citizens living on Social Security have no choice but to pay sales taxes when they shop for their needs. In 2013 when the Maine Legislature last felt it was under severe budget pressure, they voted to raise the sales tax by 10%. The sales tax on meals at restaurants was increased by over 14%. Medicaid expansion is expected to cost Maine up to $100 per year based on projections. The money will need to come from somewhere. If you vote “yes” you need to make your choice on what will be cut or how much more our seniors and families will need to pay every time they, and you, shop or visit a restaurant.
Welfare fraud is a problem. When providers, or recipients, commit welfare fraud it takes resources away from Maine’s most needy. A FORBES magazine article titled, “Medicare and Medicaid Fraudsters Bilk Taxpayers of Trillions,” notes that nationally that over 8% percent of Medicaid spending was fraudulent or improper as far back as 2009. Just last year a licensed counselor in Maine plead guilty to committing Medicaid fraud by submitting false reports. This year an Optometry Practice in Brunswick agreed to pay fines in a civil fraud case for false claims, including those to Medicaid. In May of this year a dentist in Damariscotta agreed to pay $90,000 in a civil case for fraud related to Medicaid. If we expand Medicaid under Question 2, an increase in fraud will follow.