As conversations swirl on Capitol Hill and across the nation regarding the repeal of Obamacare and Medicaid reform, I would like to describe Maine’s success in reducing Medicaid enrollment by 24 percent in the last five years and why our experience is relevant to the ongoing debate.
In our corner of the United States, we have made tough decisions to restore fiscal discipline and strengthen our financial commitments within Medicaid for our elderly and disabled.
To understand how far we’ve come, you need a bit of background about where we were.
From 2000 to 2010, previous administrations expanded Maine’s Medicaid program, causing it to double both in enrollment and cost. Due to annual shortfalls, the state was unable to pay hospital bills and provider rates were constantly slashed to bail out the Medicaid program.
The worst of it all, these prior expansions came at the direct expense of our elderly and disabled as nursing facility costs were ignored, home care services were grossly underfunded, and wait lists for home and community services for individuals with intellectual and developmental disabilities grew longer.
It is important to note that throughout these expansion years, Maine’s uninsured rate remained largely unchanged as individuals dropped their employer-sponsored insurance coverage to enroll in Medicaid.
For more than a decade, Maine’s finances were in perpetual crisis because of explosive Medicaid growth and out-of-control spending. This is the very same scene that we see playing out today in many of the expansion states as they grapple with sizable state budget shortfalls.
With their significant federal matching rate, these states are turning to rate cuts on services supporting the elderly and disabled to fill their state shortfalls and balance their budgets as states must do.
A disturbing trend not discussed nearly enough but is painfully obvious: Obamacare has essentially created a golden circle around the able-bodied adults on Medicaid with the substantially higher federal matching rate.
This is why we’ve spent the last six years reining in Maine’s Medicaid program. As we’ve reduced enrollment by 24 percent, we’ve contained spending to an average 2 percent rate of growth compared to the national average of 6 percent.
This year, we are forecasting a 0.7 percent increase.
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At the same time, however, we have been able to increase funding to nursing facilities by over 40 percent, increase rates to home care by 60 percent, and add an additional $100 million to support the needs of individuals with intellectual and developmental disabilities.
Additionally, we’ve invested in increased support for primary care to better manage individuals with chronic diseases and to integrate primary care and mental health for those struggling with mental illness.
None of these priorities would have been funded in Maine had we expanded Medicaid. And unlike Maine’s previous expansion years, our uninsured rate has declined.
With Medicaid’s fiscal crisis now behind us, and with Gov. Paul LePage’s leadership, Maine has reduced taxes, stimulated job growth, and is experiencing one of the lowest unemployment rates in nearly 10 years at 3.8 percent.
The federal government must now take a similar approach in repealing Obamacare.
We must reduce the size of this massive government entitlement program, lower the tax burden on our states to promote job growth, and re-establish Medicaid’s core mission of supporting our elderly, disabled, and extremely low-income families.
Specifically, here are four actions Congress should take to reform federal Medicaid:
- Repeal the Medicaid expansion.
- Enact an immediate freeze on new enrollment.
- Roll back higher the Federal Medicaid Assistance Percentage by 2019.
- Mandate work requirements for able-bodied adults, similar to the Supplemental Nutrition Assistance Program.
The current House proposal that delays the repeal of the Medicaid expansion will absolutely trigger a push to expand Medicaid in nonexpansion states—Maine included—by the same advocacy groups that have been trying for the last several years.
Such an effort will bankrupt our state and send us backward from the economic stability we have achieved today.
We cannot afford to go back. We have reined in the out-of-control Medicaid spending that failed to prioritize our neediest citizens, exacerbated Maine’s tax burden, and overshadowed other state priorities.
There is still more for us to do, but we’ve been headed in the right direction and cannot afford this shift in course.
We must remember that federal tax dollars are never free, and the insatiable appetite of some states for more federal funding should never be confused with economic development. Fiscal responsibility is imperative.
Maine’s success should be a lesson to other states currently caught in the grips of uncontrollable growth and spending. It also shows what is possible at the federal level as Washington now looks to correct the fiscal mess that Obamacare left behind.