MAINE USES STIMULUS MONEY TO BOLSTER UNSUSTAINABLE MEDICAID PROGRAM

June 3, 2009

Maine Gov. John Baldacci (D) has signed an executive order authorizing the state to use federal government stimulus money to pay down debts currently owed to hospitals treating patients covered by MaineCare, the state's Medicaid program.  Currently, Maine owes almost $374 million to hospitals.

In 2006, Baldacci and the Maine Hospital Association agreed to a payment plan designed to wipe out the state's hospital debt within four years:

  • To pay off the balance of the debt as quickly as possible, Baldacci recommended earmarking $57 million in federal stimulus money in Fiscal Year 2010 for hospital debt.
  • Spending that amount would trigger a payment of $163 million in federal tax dollars to MaineCare, allowing Baldacci to knock $220 million in total off the state's current Medicaid debt.
  • The state legislature will provide final approval or disapproval of Baldacci's recommendation.

However, Tarren Bragdon, president of the Maine Heritage Policy Center, criticizes the stimulus payment plan as allowing the state to continue an unsustainable program without making necessary reforms.  The stimulus money will fund a huge increase in an already-too-expensive state budget, says Bragdon, and Maine has one of the most expensive Medicaid programs in the country, covering 1 in 5 residents.

The fact that the state has these huge Medicaid debts going back years shows how unsustainable this program is, adds Bragdon.

Source: Sarah McIntosh, "Maine Uses Stimulus Money to Bolster 'Unsustainable' Medicaid Program," Health Care News (Heartland Institute), June 2009.

 

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