MAINE VOICES: Lisa Pohlmann

Medicaid shortfall will hurt the poor

Copyright © 2004 Blethen Maine Newspapers Inc.

E-mail this story to a friend

ABOUT THE AUTHOR Lisa Pohlmann is associate director of the Maine Center for Economic Policy, a public policy think tank headquartered in Augusta (www.mecep.org). To top of story

The Baldacci administration is proposing a $109 million fix to close a budget gap for the fiscal year ending this coming June 30.

In its plan, the administration is proposing to maintain current Medicaid eligibility but institute higher co-payments, service limitations and service exclusions in the program.

The fact that costs have risen beyond projections in the Medicaid program reflects the overall crisis in Maine's health care system. Costs are too high and more people are becoming uninsured.

Comprehensive coverage for small businesses rose 58 percent between 1996 and 2001. Premium increases in the small group market were running 15 percent to 20 percent in the first quarter of 2003.

These high premiums are buying less coverage with higher co-payments. Many employees with low income have declined or dropped their coverage because they cannot afford the out-of-pocket costs.

THE COST of private insurance would be going up even faster if the Medicaid program were not covering 241,000 low-income Mainers. Medicaid operates as the state's high-risk pool, covering the most expensive low-income populations, thereby reducing the burden on the private sector.

The elderly and disabled make up about one-third of the Medicaid enrollees and account for about two-thirds of Medicaid spending. Other low-income adults and children make up the balance.

If these individuals were uninsured, they would delay needed medical care, worsening their health. They would eventually show up at the emergency room because they would have no other means of accessing care. At that point, their care would be much more expensive because of their worsened condition and the high cost of emergency room care.

Because they could not afford their hospital bills, these costs will then be passed on to consumers in the private insurance market as higher hospital costs. In the end the entire system would be more costly and less efficient, and health outcomes for the poor would be worse.

WHILE THE administration is proposing these Medicaid program reductions, it is also trying to institute Dirigo Health, a program to bring universal health coverage to all Mainers.

At the core of this plan is the understanding that in order to bring costs under control, more people must be covered and more health care provided to them.

Otherwise, cost shifts will continue to occur and more people will become uninsured.

The Medicaid reduction proposals work at cross-purposes with the goals of Dirigo Health by increasing barriers to access. Maine Medicaid recipients have co-payments for numerous services, but federal Medicaid law prohibits the denial of services if a recipient cannot afford to make the co-payment (although he or she will remain liable for it).

The administration proposes to pursue a Medicaid waiver in order to deny care to recipients who cannot pay their co-payments. Such denials will likely increase avoidable, expensive health care emergencies.

Individuals and families with incomes low enough to qualify for Medicaid continuously struggle to cover food, shelter, and transportation to work, and they are already paying four times more, in proportion to their income, for out-of-pocket health care than the middle class. Co-pays for prescription drugs or preventive care can easily become unaffordable.

THE CURRENT service reduction proposals create a similar bind. An individual on SSI with a monthly income of $562 would not be able to afford making up for physical therapy or other treatments they require to maintain basic functioning unless they went without some basic needs.

The state receives two federal dollars for every dollar it spends in Medicaid, and program costs are actually not rising as dramatically as private sector costs.

Effective cost-control measures have been implemented over the last several years, and Maine's Medicaid program administrative costs are about one-third of those in the private insurance market.

Dirigo Health can help Maine control runaway costs, provide affordable quality care for everyone and include health promotion and disease prevention.

It will also take time to implement. We should not undermine this initiative by making penny-wise and pound-foolish cuts in the Medicaid program.

- Special to the Press Herald

To top of page