DHHS Shortfall Myths and Facts
MYTH: The projected $220 million shortfall was caused by a growth in enrollment.
FACT: According to the Department of Health and Human Services’ analysis, the total cost of increased enrollment in MaineCare accounts for $6.5 million of the shortfall in 2012 and a projected $7.9 million of the claimed shortfall in 2013. Enrollment growth accounts for only 6.5 percent of the total projected $220 million shortfall. According to DHHS, the biggest driver in the 2012 shortfall — $29.9 million — is the result of a new claims system that caused benefit payments that should have been settled last year to be paid this year. The shortfall has been caused by his administration’s miscalculations in building the budget, a transition from claims processing from one computer system to another and a change in how we make payments to providers. These are problems related to program administration, not program growth.
MYTH: Enrollment growth is out of control. The state has spent more than it can afford on MaineCare.
FACT: According to DHHS, the total funding for the MaineCare program has been largely flat since 2006. Expenditures for the MaineCare program totaled $2.24 billion in 2006 compared to $2.44 billion in 2011. This is an increase of only 8.9 percent in expenditures over a five year period when medical care inflation has grown at a rate of 19.9 percent during the same time period. MaineCare caseloads have increased since 2002, but the costs have remained relatively flat. Growth in enrollment has largely been linked to the recession and from enrolling nearly 20,000 seniors and people with disabilities getting prescription drug help paid for with all state funds to the Medicaid program in 2007, where the state gets the benefit of federal matching funds.
MYTH: The majority of childless adults, referred to as non-categorical or non-cats, are “able-bodied” and “young.”
FACT: A new report from the Maine Equal Justice Partners, conducted with a leading physician and other expert, shows that the recipients are typically older than has been claimed and have serious medical conditions. Key findings from the report include that 60 percent of recipients in this group are 35 or older; 43 percent are 45 or older; and 47 percent of those using the program have diagnosed medical conditions, such as cancer and diabetes. Recipients of public health insurance must earn at or below 100 percent of the federal poverty level, which is $10,890 a year for one person. The state will be required – and will be compensated by the federal government – to cover these adults under the Federal Affordable Care Act in 2014.
MYTH: The Office of Fiscal and Program Review(OFPR) verified the LePage Administration’s shortfall analysis.
FACT: The Legislature’s non-partisan fiscal office confirmed that DHHS was on track to spend the $120 million over budget in fiscal year 2012, but they were unable to independently verify the costs for 2013 or to fully agree on the cost drivers for either year. There has been no agreement on which costs are one-time versus ongoing. According to the Bangor Daily News, OFPR Director Grant Pennoyer told the Appropriations and Health and Human Services Committees that his office was “closer, but we are still a ways off from having a good enough understanding to provide independent confirmation of the shortfall.”
MYTH: MaineCare is welfare.
FACT: MaineCare is a health care program. It provides health insurance and prescription drug coverage for the elderly, disabled, mentally ill and the poor. Seventy percent of enrollees are either children, seniors or individuals with disabilities. The health care needs of those who will lose coverage under the governor’s budget will not go away. Deprived of their insurance, their health will no doubt decline, unattended problems will become more severe and costs will be shifted to hospitals and people in the private insurance market. We have a health care crisis in this country with more of our neighbors unable to pay the costs for health coverage. MaineCare is filling the gap. Maine is tied for 6th in having the lowest uninsured rate in the country. MaineCare has helped Maine be ranked as the 8th healthiest state in the country. This high rate of insurance also means fewer uninsured patients turn up at emergency rooms for expensive care that is not reimbursable. When that happens hospitals must eat those costs, which results in costs that must then be passed on to private insurers.