MHPC: Don’t Expand Maine’s Medicaid Under Obamacare

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Expanded Medicaid enrollment increases private insurance rates, burdens taxpayers without reducing number of uninsured

PORTLAND – The Maine Heritage Policy Center today released a report saying that Maine should not expand its Medicaid coverage under Obamacare. States will have the option to add government-funded coverage for healthy individuals under 65 who are at 133% of the poverty level because of the controversial health care overhaul. Originally, the law sought to force states to expand Medicaid, but the Supreme Court threw out that requirement, giving states the option to deny the expansion without penalty.

In Maine, more than 25 percent of all residents are on Medicaid, and the MHPC report says that adding more enrollees to a system that is already too expensive would spell disaster. Despite Obamacare’s promise to initially cover 100 percent of expansion costs, the federal government has a track record of underfunding Medicaid expansions.

“When considering this ill-advised expansion plan we need to remember first and foremost that federal money is never free,” said the author of the report, MHPC’s Director of Health Reform Initiatives Joel Allumbaugh. “We are fooling ourselves if we pretend that federal money is anything other than our own tax dollars, despite what advocates for government-run health care will say.”

“Federal funding is also for eligibility expansion – not administrative costs,” Allumbaugh added. “Ultimately, Maine will bear the cost of administering a projected 37,000 new enrollees, most of which will translate to new permanent fixed administrative expenses.”

The study also showed that in Maine’s past Medicaid expansions the uninsured were not helped by the expansion, but instead, Maine residents dropped privately held insurance to go on taxpayer-funded plans. Maine’s uninsured rate is nearly the same as it was in 1999, while government-run health care enrollment has more than doubled in the same time period, from 10 percent of those insured to more than 23 percent in 2010.

“Governor LePage and his administration have made great strides to solve Maine’s health care challenges and reduce our dependence on government-run health care programs,” Allumbaugh said. “Pushing forward with Obama’s proposed Medicaid expansion would take Maine backwards, towards more government dependence. We can’t let this happen, Maine taxpayers and ratepayers deserve better.”

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Read the full report online here

Download the full report here (PDF)