February 27

FROM THE STATE HOUSE: Managed care tackles both aspects of MaineCare debate

Sen. Roger Katz

To mention the word “MaineCare” under the State House dome is the equivalent of throwing off your gloves in a hockey game: It’s an invitation to brawl. I am invoking MaineCare in this column for a different purpose, however, as an opportunity for Democrats and Republicans to find common ground.

Let me start with two incontrovertible facts. First, the MaineCare program has been a management mess for years. It is an equal opportunity problem; it has tormented Republican, independent and Democratic governors alike. The system reimburses some providers for more than they are owed, while others don’t get enough. For the past dozen years, like clockwork, the governor has submitted supplementary appropriations requests to cover the “unexpected” cost overruns of MaineCare. Then every few years or so, as with Riverview Psychiatric Center now, the federal government penalizes the state for making illegal expenditures, and the Legislature has to scramble to fill yet another budget gap.

This is no way to run a railroad. Meanwhile, the railroad is growing. In the 15-year period between 1997 and 2012, MaineCare costs to the general fund increased by $500 million, and the proportion of the state general fund budget dedicated to MaineCare grew from 13 percent to 24 percent.

For Democrats and Republicans who care about having state funds available in the future for our university system, for early childhood education, for highways, for public schools and for municipal aid, MaineCare is a major problem. It is a system with chronic mismanagement, growing to absorb more and more of discretionary state spending over time. It must be addressed.

That is fact No. 1. The second fact is simpler: In many ways, the MaineCare expansion that the federal government is offering Maine is a sweet deal. It would bring around $330 million per year into the state were we to accept it. That’s almost $1 million per day, every day, including Sundays.

This new money would pay for rural clinics, family doctors, home care workers, nurses, X-ray technicians, hospitals and health workers of all kinds. The money would support between 2,000 and 2,500 middle-class health care jobs in Maine (and many other indirect jobs). Remember that while low-income and elderly people are the beneficiaries of MaineCare, they don’t actually see any of the money — the checks are cashed by middle-class workers. The MaineCare expansion could, by itself, reduce the unemployment rate in Maine by as much as a half-percent.

This is a comparable effect on the Maine economy as when the federal government funds a new destroyer at Bath Iron Works. It is the equivalent of the major manufacturer that the governor hopes to attract in his proposed “Open for Business” zone. The difference, however, is that the benefits from the MaineCare expansion would be statewide, and not concentrated in one geographic area. Washington County would gain about 150 jobs, Aroostook about 250, and Penobscot about 500. Everybody would win.

And, by the way, 70,000 people would get health insurance coverage, and better care for health problems such as cancer and drug addiction and heart disease. And the rest of us who pay for private health insurance would benefit from the lower rates that would result from our not having to pay for so much charity care.

For Democrats and Republicans who worry about the unemployment rate in rural Maine, there is no more effective single action that they could take to stimulate the economy next year than by voting for the MaineCare expansion.

So we have two facts. The MaineCare program is chronically mismanaged, and the MaineCare expansion offers an unparalleled opportunity for economic gain. This should be our common ground.

(Continued on page 2)

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