Last week, Maine lawmakers joined for the first meeting of the 132nd Legislature in Augusta and were greeted by a new memo from the governor’s budget office. The memo advised that the Legislature address a $450 million General Fund shortfall and an immediate shortfall in the MaineCare program for the current fiscal year totalling $118 million.
Some were shocked by the MaineCare deficit in the current fiscal year, but not all, as Maine Policy Institute warned about this years ago when MaineCare expansion was originally passed. During a period when Maine is already short on money, the incredibly costly MaineCare expansion should be sunsetted to help Maine address about $118 million in costs that the state is not currently prepared to pay.
MaineCare is the state-level Medicaid program, and the Affordable Care Act expanded Medicaid to nearly all adults with income below the federal poverty level. Although voters mandated Maine’s Medicaid expansion rollout in 2017, Gov. LePage resisted implementing it and Gov. Mills campaigned on implementing expansion in her first days as governor. In 2023, a large amount of federal support for state Medicaid rollout was removed, and almost immediately after, nearly half of the states reported Medicaid budget challenges.
It has been known for years that Medicaid expansion costs are generally greater than what states project due to increased enrollment in a newly available “free” healthcare program. In 2018, the Foundation for Government Accountability found that the cost of expansion to individual states, on average, was 157% more than expected, with some states’ Medicaid expansions costing more than 200% more than the costs projected by state governments prior to expanding. Combining this with the removal of federal support for MaineCare and continued spending on Maine’s Medicaid Stabilization Fund makes the MaineCare shortfall more and more predictable.
According to the Mills administration’s budget constraints memo, if extraordinary steps are not taken to remedy this problem soon, the Maine Department of Health and Human Services may be forced to limit payments to healthcare providers as early as this spring. This is concerning because the federal government covers 90% of Medicaid costs for the people covered by expansion but only 50-74% of costs for core Medicaid users. Suppose the DHHS starts practicing Medicaid payment triage. In that case, they may prioritize the population of able-bodied childless adults in Medicaid expansion over traditional Medicaid recipients (the elderly, pregnant women and children) because they are simply more affordable to provide coverage.
We can’t be sure precisely what DHHS will do when they don’t have enough money to cover healthcare costs, or what will happen if Maine starts handing out IOUs to hospitals again for providing coverage to MaineCare users. While the Emergency Medical Treatment and Labor Act is a federal law that requires hospitals to provide emergency care to those who need it regardless of insurance, it does not cover all care, such as nonemergency or ongoing care. Additionally, it doesn’t mandate coverage of routine checkups. If local practitioners know their patients can’t pay, they might refuse service, and core MaineCare recipients’ health may suffer because Maine cannot afford the full costs of MaineCare expansion in 2025.
Maine already has enough on its plate without continuing to fund expensive Medicaid expansion, especially with the recently growing costs. We need to get this problem off our plate once and for all and undo Maine’s Medicaid expansion. Otherwise, we may be unable to provide healthcare to our most vulnerable Medicaid recipients.