Maine Governor Proposes Throwing 30,000 Off Medicaid: ‘We Should Not Be More Generous Than Other States’

Maine Governor Paul LePage (R) — a vocal opponent of the Affordable Care Act — is proposing reforming MaineCare, the state’s Medicaid program, by reducing eligibility to the level in place in most states, thereby throwing off some 30,000 Mainers off the rolls. “This is what the level is in 47 other states,” LePage said in an interview. “We should not be more generous than these other states, but we are and we have been and it needs to stop.”

LePage predicted that the newly uninsured population will be able to find coverage though a new state insurance law that allows consumers to buy health insurance across state lines and through employer-based captives, insurance companies that are allowed to finance and leverage risk without having to buy additional insurance to cover that risk. The measure is part of LePage’s market-based approach to health care, but even Republicans are skeptical that it will be able to offer affordable coverage to lower income residents. Sen. Richard Rosen (R), co-chairman of the Appropriations Committee that has rejected similar proposals from LePage, told the Bangor Daily News that while “he agreed with the concept the governor is pushing of having individuals and families pay for part of the their health care costs,” forcing Medicaid beneficiaries to go out and purchase insurance “may be premature.” Democrats argued that the proposal is not feasible:

LePage said the new state health insurance law has provisions to make health insurance more affordable, and he believes many of those who are between the current 200 percent of poverty level and 133 percent can help pay for their own insurance coverage.

Rep. Peggy Rotundo, D-Lewiston, the lead Democrat on the [Appropriations] committee, disagrees.

She said the 133 percent level is $14,484 for a single adult. For a family of four, it is $29,726. She said families and individuals at those income levels simply can’t afford health insurance at current rates.

“The more health care we take away from people, the more those costs are shifted to people who have health insurance and more shifts to local communities and local hospitals,” she said. Rotundo said covering those families and individuals with Medicaid is cost-effective for the state with the federal government paying about two-thirds of the bill.

That last point isn’t even up for debate. LePage would transfer beneficiaries from a fairly efficient government program to the highly inefficient private market, where policies are incredibly expensive (particularly before the Affordable Care Act reforms are implemented). One recent study found that “after controlling for health status, age, gender, income, and other factors, the average per person annual cost of serving an adult on Medicaid was 20 percent less than under private insurance and the annual cost of serving a child on Medicaid or CHIP was 27 percent less than under private insurance.” LePage’s new law — which would allow insurers to cherry pick the healthiest beneficiaries — will likely go even further in dividing the health insurance market and increasing costs for those former Medicaid patients who need the most coverage. Meanwhile, limiting eligibility would “save the state less than $7 million a year–costs they claim will simply be shifted to local governments, hospitals and those with health insurance.”