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Maine Democrats Tie Hospital Debt Plan to ACA Medicaid Expansion
03/11/2013   Reported By: Patty B. Wight

It was just 30 minutes before Gov. Paul LePage presented his liquor bill to members of the Legislature that Democrats unveiled a competing plan to pay back the nearly $500 million in Medicaid debt owed to state hospitals. While LePage's plan would use proceeds from state liquor sales to pay the debt, Democrats say their plan more effectively harnesses the state's liquor contract to pay the bill and also improve health care. Patty Wight reports.

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One of the weaknesses of Gov. LePage's plan, according to Senate President Justin Alfond, is that the state would borrow money to pay the hospital debt through issuing a bond. The Democrats plan is safer, says Alfond, because it requires the winning bidder of the state liquor contract to pay the bill.

"There is no risk associated with this because we are using the private sector - the experts in the liquor industry - to pay back the state of Maine, so we can pay back the hospitals," Alfond said.

And the Democrats' plan goes even further than paying the hospital debt, says House Speaker Mark Eves, because it establishes health care reforms to avoid future hospital debt. To accomplish that, says Eves, Maine needs to tackle one of the biggest cost drivers in health care - charity care.

"We are proposing that the state of Maine accept the federal dollars to expand health insurance to 70,000 Mainers while saving $690 million," Eves said.

In other words, Democrats want the state to take advantage of the Medicaid expansion offered under the Affordable Care Act. The expansion would kick in federal money that fully covers the cost for the first three years, then 90 percent in subsequent years.

Gov. LePage, like many Republican governors, has opposed the expansion. But recently, a number of Republican governors - including some of the most staunch opponents to the expansion - have reversed their position. The thought is that if other states are going to benefit from federal tax money, their's should too.

So, is Gov. LePage having any second thoughts? His spokeswoman, Adrienne Bennett, says Maine already offers some of the most generous benefits of any state.

"So we do not benefit like other states do," she says. "With that said, if we were able to leverage a good deal - we've got a great businessman as a governor - he wants a better return on investment. If something can be done to address and recognize the fact that Maine has been overly generous in comparison with other states, then maybe we can move forward with a dialogue."

Bennett says just as Gov. LePage is looking for a good deal before he would agree to expand Medicaid, he's also looking for the best deal to pay back hospitals - which, she says, Democrats aren't offering. She says shifting the bill to the winning bidder of the liquor contract creates new problems.

"They have to make up that money somehow, so they're going to give the state less of a deal moving forward," Bennett says. "If we take this opportunity to manage finances, all of that revenue comes to the state and we're able to use that to our advantage to put it in different programs."

The governor's plan, says Bennett, would advance over $100 million in bonds for things like clean water and transportation projects, as well as stock up the state's depleted rainy day fund.

While Gov. LePage and Democrats disagree on just how to pay back hospitals, Jeff Austin of the Maine Hospital Association says he's just happy that both Democrats and Republicans want to pay the debt.

"Our one, sort of, concern would be, we need one law," Austin says. "We've got two plans, but we need one law. We need something to pass."

That's something likely everyone can agree on.



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