Maine Medicaid Check Up Series Part III: Non-Elderly Adult Medicaid Spending

Read the full report | Recently, Maine state revenue forecasters projected a $95 million budget gap for the current biennium. As the Legislature goes into session in January 2008, Medicaid and Medicaid spending will be at the forefront of debate as lawmakers once again to balance the budget. Before making Medicaid reforms, policymakers must understand how Maine’s Medicaid spending is higher. This series compares Maine Medicaid spending to the U.S. average and the average of the other New England states.

Maine has the second highest spending per non-elderly adult Medicaid beneficiary (19-64 years old) of the 50 states and the District of Columbia. Maine is 89 percent more expensive per adult Medicaid beneficiary than the U.S. average, or $4,648 per adult compared to the U.S. average $2,463. Maine is 62 percent more expensive per adult Medicaid beneficiary than the other New England states, which average $2,903.[1,2] In 2004, Maine Medicaid spent over $450 million to cover almost 97,000 nonelderly adults. This spending level gave Maine the largest adult Medicaid program in the country, despite Maine’s lower than average rate of adults in poverty.

In the five years from 1999 to 2004, Medicaid spending for non-elderly adults increased 451 percent, to over $450 million from $81 million. The spending increase was due, in part, to the number on non-elderly adults on Medicaid increasing 257 percent, to 97,000 from 27,000. Spending per non-elderly adult beneficiary grew by 54 percent in Maine, more than twice the rate of medical inflation, compared to the U.S. average of 20 percent, which was less than medical inflation.

Maine Medicaid could save almost $212 million with average spending for every adult on Medicaid or save $169 million if spending were at the average for the other New England states.

• Maine spends 155 percent more on mental and behavioral health services for adults than the U.S. average – $289 per adult Medicaid beneficiary compared to $113.  Having average spending would save $17 million.

• Maine spends 81 percent more on major medical care per adult Medicaid beneficiary than the U.S. average – $3,568 compared to $1,973. Having average spending in this area would save $154 million.

• Maine spends 125 percent more on prescription drugs per adult Medicaid beneficiary than the U.S. average — $656 to $291.