Opponents Decry Proposed Cuts to DHHS in LePage’s Budget

Feb 21, 2017

Gov. Paul LePage’s proposal to slash $140 million from the Department of Health and Human Services drew its first wave of opposition during public hearings held Tuesday. Opponents lined up to argue against steep cuts to the state’s MaineCare program, as well as changes taxes and reimbursement to Maine’s hospitals.

Overall, the governor’s two-year budget plan is designed to cut government spending to help pay for an aggressive reduction in the state income tax. In doing so, the governor’s plan to fund Human Services could result in eliminating MaineCare health coverage for up to 20,000 Mainers. It also cuts MaineCare reimbursement rates to rural hospitals and increases taxes on hospitals statewide, while cutting rates for primary care physicians who work for hospitals by an estimated $16 million.

DHHS Commissioner Mary Mayhew says the proposal advances the administration’s efforts to move reduce spending for MaineCare, the state’s version of Medicaid that has cause deficits in the past.

“The massive shortfalls in Medicaid overshadowed other core state priorities and have been exacerbated the tax burden in this state,” she says.

But opponents of LePage plan say it’s unnecessarily harmful. The Maine Hospital Association’s Jeff Austin says the plan represents a $66 million annual cut to state hospitals, some of which are already ailing amid increases in charity care to low-income Mainers and reimbursement cuts by the federal government.

“This is an artificial crisis that throws us off the path that we’ve been on. We say stay on the path that we’ve been on,” Austin said.

The hospitals say that the governor’s budget hits them in four ways, including a reduction in MaineCare eligibility designed to save the state $33 million. It would reduce eligibility so that able-bodied adults could earn no more than $9,720 a year to qualify for MaineCare. That’s 40 percent of the federal poverty level.

The cut would be in addition to previous MaineCare cuts by the LePage administration that have cut the rolls by an estimated 92,000 Mainers. According to the Kaiser Family Foundation, Maine is ranked No. 18 toughest in the country in terms of eligibility for able-bodied adults.

Mayhew framed the MaineCare cuts as furthering the administration’s goal of weening Mainers off welfare. When Democrats pressed her about the effects of stripping Mainers of coverage, Mayhew suggested that many affected by the cuts would find private insurance through new, better-paying jobs. She was also asked about those who are afraid to take a better-paying job for fear of losing MaineCare.

“That is not in their best interest to be trapped in these programs,” she says.

The governor’s DHHS proposal to cut anti-poverty programs faces long odds in a Legislature divided between the Democratic-controlled House and the Republican-led Senate. The same goes for many other initiatives in LePage’s budget, which is designed to further his goal of cutting Maine’s income tax. He has made incremental progress on that front since first taking office in 2011.