AUGUSTA – The Legislature’s Democratic leaders have told Gov. Paul LePage that they will pass his plan to pay back Maine’s hospitals but they want it directly linked to the state’s participation in a federal program to expand health care coverage for low-income Mainers.

LePage blasted the proposal Friday, saying Democrats had “reneged” on their agreement to pay the state’s 39 hospitals for overdue Medicaid reimbursements.

House Speaker Mark Eves, D-North Berwick, and Senate President Justin Alfond, D-Portland, told the governor their plan Thursday during a closed-door meeting in the governor’s Cabinet Room. It marks a shift in the debate over paying back more than $484 million to the hospitals and a separate policy to expand Medicaid to about 55,000 Mainers. 

The two proposals have been linked because Maine’s hospitals, which are influential in state politics, support both. But the Democrats’ proposal is their first attempt to directly tie LePage’s hospital payback plan to his acceptance of federal dollars to expand Medicaid.

It’s also one of the first attempts by Democratic leaders to assert themselves by leveraging their legislative majority to advance one of their primary policy initiatives. 

Eves has said that expanding Medicaid through an initiative in the Affordable Care Act is the “right thing to do morally, practically and economically.”

Democratic leaders are gambling that popular support for expanding health care coverage will win over claims that they’re delaying repaying the hospital debt.

Republicans and LePage have made great use of the latter claim: LePage’s political allies have run television ads claiming that former Democratic Gov. John Baldacci and the Democratic-led Legislature are responsible for the debt. The ad claims that the debt has caused layoffs and jeopardized health care for “seniors and families.”

LePage made a similar statement in a news release late Friday afternoon. 

“Maine expanded welfare 10 years ago, and we still haven’t paid that debt,” said LePage. “Mainers know that hospitals provide good jobs and are vital to the local economy. They know that paying our bills is the right thing to do. So why are Democrats still refusing to pay the hospitals?”

The Medicaid debt began accumulating years before Baldacci took office in 2003. It has been attributed to a payment system that didn’t keep pace with hospitals’ Medicaid claims to the state.

Baldacci and the Legislature made payments that sent $3.7 billion to hospitals over the last decade, but not enough to erase the debt.

On Friday, Democratic leaders said tying the hospital payback to Medicaid expansion makes sense. An analysis by the Kaiser Family Foundation projected that Maine will save $690 million in the next 10 years if it accepts the federal dollars. 

“By accepting federal health care dollars and repaying our hospitals in one fell swoop we will cover more Mainers, save the state and hospitals money, and boost our economy,” said Eves. “This is a common sense marriage of ideas. It’s important to approach health care in a comprehensive way that both addresses past obligations but also reduces costs and expands coverage going forward. To do one without the other would leave our work only half done.”

Alfond issued a news release Friday night saying: “Democrats are committed to paying back the hospitals and plan to do so. In addition, we want to help solve the health care crisis and need a comprehensive approach to managing our health care costs — and that includes accepting federal health care dollars.”

The Medicaid expansion would cover “able-bodied” parents, and adults who have no children and earn as much as 133 percent of the federal poverty level — just over $20,500 a year for a two-person household.

The federal government would pay 100 percent of the state’s costs for the expansion from 2014 to 2016. In subsequent years, reimbursements would decline gradually to 90 percent of the state’s costs.

LePage has expressed willingness to participate in Medicaid expansion, but he is getting pressure not to expand a program that Republicans often call “welfare” and blame for the state’s ongoing budget problems. 

The administration has told the Obama administration that Maine will consider participating in the expansion if the federal government pays for affected recipients for 10 years.

The proposal, outlined in a letter to U.S. Health and Human Services Secretary Kathleen Sebelius, is effectively LePage’s counterproposal to the federal government’s plan.

In the letter to Sebelius, Maine Health and Human Services Commissioner Mary Mayhew said the state has been penalized for voluntarily expanding Medicaid eligibility in 2003. She said that because federal reimbursement rates for some Medicaid recipients have since decreased, other states are getting a better deal for participating in the expansion than Maine would.

Democratic leaders have said the governor’s proposal isn’t likely to win approval but they are encouraged that LePage is looking to accept federal dollars to expand Medicaid in Maine.

The state is projected to spend $776 million on MaineCare — as Medicaid is called in Maine — in the fiscal year ending June 30. That’s 25 percent of its overall budget.

Counting federal money, nearly $2.4 billion will be spent on MaineCare this year.

LePage, in his prepared remarks, said “common-sense legislators” want to pay the hospitals “but Democratic leadership is refusing to let them vote on it.”

LePage said: “Let’s put each legislator on the record with a clean vote on the hospital bill. Do they want to pay the hospitals or not?”

Steve Mistler can be contacted at 620-7016 or at:

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