Alexander Group President Gary Alexander, left, senior associate Erik Randolph and Maine health and human services commissioner Mary Mayhew, listen at a legislative hearing Tuesday.
AUGUSTA — A consultant hired by the LePage administration faced withering questions Tuesday from Democratic lawmakers who tried to undermine his report recommending that Maine not expand Medicaid to cover tens of thousands more people.
The Democrats on the Health and Human Services Committee homed in on the report’s projection that poverty will increase in Maine at rates that exceed federal estimates, saying it calls the entire report into question.
The report’s conclusions jibe with Gov. Paul LePage’s stance that the state should not expand Medicaid eligibility under the federal Affordable Care Act, a position that many Republican governors are taking.
If the state’s Medicaid program, MaineCare, were expanded, 70,000 to 100,000 people would immediately gain no-cost, taxpayer-funded health insurance, which Republicans say has the potential to break future state budgets. The 70,000 figure comes from expansion advocates, and the 100,000 estimate is from Alexander’s report.
At one point in the hearing, Mary Mayhew, Maine’s health and human services commissioner, defended Gary Alexander, the Rhode Island-based consultant who was hired to study the state’s public welfare programs.
Issues brought up by Democrats “(do) not discredit ... the benefits of this report,” Mayhew told the panel.
But Rep. Drew Gattine, D-Westbrook, said Alexander’s report is disappointing and represents a step backward in the Medicaid debate. “This is a repackaging of things we have already been hearing,” Gattine said.
He said the report arrived “late in the game,” prompting a direct response from Mayhew.
“We are not here late in the game. I take offense to that notion,” said Mayhew, pointing out that Alexander will not only look at Medicaid enrollment, but will examine how the state can make its public welfare programs more efficient.
Alexander is still working on two other reports for the state, focusing on other social assistance programs. The administration said Tuesday that those studies are behind schedule because of their complexity, and will be finished “in the coming weeks.”
CONFLICTING POVERTY ESTIMATES
Democrats and health advocacy organizations railed against assumptions in the Medicaid report about Maine’s rising poverty rate, and said the report lacks an analysis of how the expansion could save money, primarily through state-based health programs that would be funded entirely by the federal government.
“(Alexander) is predicting an 18 percent poverty rate in 2022. That’s unprecedented, and higher than it was during the Great Recession,” said Sara Gagne-Holmes of Maine Equal Justice Partners, a nonprofit group that favors Medicaid expansion.
Gagne-Holmes, who testified before the committee, said the poverty rate projected in the report is much higher than projections by the U.S. Congressional Budget Office and the federal Office of Management and Budget.
The poverty rate is built into the report’s projection that expanding Medicaid would add 124,000 recipients and increase the state’s costs by $807 million over 10 years. Without those poverty assumptions, Gagne-Holmes said, the projections in the report fall apart.
“That is the heart of the analysis in this report, that more people will be poor and need to be on Medicaid,” she said.
With poverty projections so different from the federal estimates, the methodology for reaching those numbers should have been detailed in an appendix of the report, Gagne-Holmes said. The report contains no explanation of the methodology.
CENTRAL ISSUE: COST VS. BENEFITS
Erik Randolph, a senior associate with the Alexander Group, said a team of actuaries and accountants devised the poverty projections, spending “a considerable amount of time pulling data to reflect these trends.”
Alexander said his firm made projections not on what it hopes might happen, but on realistic estimates about how poverty will climb.
He presented his report last week, as the first installment of a $925,000, taxpayer-funded study of Maine’s public assistance programs. The LePage administration says the report reinforces its decision to not expand MaineCare eligibility despite the promise of federal funding to cover most of the cost.
Democrats in the Legislature continue to argue that the state should accept federal funds and expand health care coverage to an estimated 70,000 Mainers.
The federal government says it would cover 100 percent of the cost of the Medicaid expansion in the first three years, and 90 percent in subsequent years. But even in the first year at 100 percent reimbursement, the state would have to spend an additional $33 million to cover administrative costs not reimbursed by the federal government, the report says.
REPORT DRAWS POLITICAL REACTIONS
The report has become a political football in this year’s governor’s race.
Eliot Cutler, an independent candidate, held a news conference Tuesday in Portland to criticize the report and LePage’s economic policies.
“Governor LePage has held this report out as an example of why Medicaid expansion should not occur, that it would be unsustainable,” Cutler said. “In fact, it is his policies that are unsustainable.”
LePage’s campaign spokesman, Brent Littlefield, said Cutler is “desperate” for attention. “(Gov. LePage’s) reform policies have resulted in more than 10,000 new private-sector jobs and the lowest unemployment rate since 2008,” he said.
Democratic U.S. Rep. Mike Michaud, who also is running against LePage, issued a statement saying, “It’s clear that this was an illegitimate report that was a complete waste of taxpayer funds.”
Michaud said that “expanding access to Medicaid will provide health care to 70,000 Mainers and save the state hundreds of millions of dollars over the next decade.”
David Sorensen, communications director for the Maine Republican Party, wrote in an email that about half of the Mainers who would be eligible under the Medicaid expansion could get subsidized insurance under the Affordable Care Act.
Rep. Ken Fredette, the Republican leader in the House, issued a statement praising the report.
“People who don’t like which way the facts are pointing will always find fault with some piece of methodology, but they can’t deny that putting 70,000-100,000 more able-bodied people on medical welfare would be a huge burden on Maine taxpayers,” he said.
Joe Lawlor can be contacted at 791-6376 or at:
Rep. Drew Gattine, D-Westbrook, asks a question of consultant Gary Alexander during a meeting of the Legislature’s Health and Human Services Committee in Augusta.
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