The roots of a compromise to extend Medicaid health insurance coverage to 70,000 Mainers might emerge from a study being conducted by a controversial Rhode Island contractor hired this fall by Gov. Paul LePage.

Whether State House Democrats and LePage desire to forge such a compromise is unknown and uncertain, as the two sides have warred over Medicaid expansion for more than a year.

LePage and Democrats in the Legislature signaled in October that they could be open to such a compromise, but since then partisan attacks over Medicaid and other issues have escalated, including over the hiring of Rhode Island contractor Gary Alexander, founder of The Alexander Group.

But while controversies have recently followed Alexander, he is also known in some circles as an innovative reformer of government programs.

Could that reputation lead to a “grand bargain” over MaineCare, Maine’s Medicaid program, granting health insurance to an additional 70,000 uninsured residents? Or will recent controversies involving Alexander in Pennsylvania and partisan bickering over the way he was awarded a $925,000 no-bid contract in Maine sink any such chance of compromise?

Alexander supported alternative ways to expand Medicaid in Arkansas, and in Rhode Island, he was known as a competent, well-liked reformer, a University of Rhode Island political science professor said. In Rhode Island, Alexander was instrumental in that state’s obtaining a global Medicaid waiver, which has saved the state about $23 million per year, according to an independent study of the waiver’s impact.

The waiver gives the state more flexibility to design its own Medicaid programs, wringing efficiencies out of the system and making tax dollars stretch further without cutting services.

“He was regarded very highly in Rhode Island,” said Maureen Coakley, a political science professor at the University of Rhode Island. She said the Medicaid waiver, approved in 2009, sailed through the state legislature and was supported by both parties. “It was known as a progressive, innovative program. It wasn’t controversial at all.”

Alexander did not respond to requests to comment for this story.

Alexander, in a $220,000 study for the Arkansas state government, recommended a compromise alternative to Medicaid expansion, although a plan to do so was already in the works. The federal government approved the Arkansas plan this fall.

While Maine has hired Alexander to work on a comprehensive study of state programs that serve low-income residents, part of his task will be to look at how other states have handled Medicaid expansion, including alternative methods like plans approved in Arkansas and Iowa. Half of the states have approved Medicaid expansion or alternative methods.

Medicaid expansion is a key part of President Obama’s Affordable Care Act, but many Republican governors, including LePage, have rebuffed attempts to expand Medicaid, claiming that federal funding will dwindle in future years. Medicaid is a federal program administered by the states, and the U.S. Supreme Court in 2012 ruled that states could opt out of Medicaid expansion. About half of the states turned down the expansion, although some are devising these complicated workarounds.

Alexander also headed up the Pennsylvania Department of Public Welfare for two years before controversies resulted in his ouster in February – such as his charging taxpayers for commuting from Rhode Island to Pennsylvania. Austerity measures that Alexander advocated in Pennsylvania, including cuts to food stamps, public assistance and Medicaid, also stirred controversy.

Pennsylvania last week proposed an alternative to Medicaid expansion, although Alexander was not directly involved in that plan because he had left before it was drawn up, Pennsylvania state officials told the Press Herald.

In October, LePage praised Pennsylvania Gov. Tom Corbett, as well as Arkansas and Iowa, in written remarks, for discovering inventive ways to increase health coverage without expanding Medicaid. LePage also credited Obama for being flexible with states that are looking at alternative models.

LePage spokeswoman Adrienne Bennett said Thursday the governor’s office would not be commenting for this story. But in October, Bennett wrote in an email response to a question that the governor “will continue to evaluate these models (in Arkansas, Iowa and Pennsylvania) and explore options for ensuring quality health care and fiscal responsibility.”

While it wasn’t about Medicaid, LePage recently introduced a proposal to impose work requirements for some able-bodied adults seeking public assistance, and limiting the types of purchases that could be made with electronic benefit transfer, or EBT, cards.

Like Maine, Arkansas, Iowa and Pennsylvania operate with a divided government, a Republican governor and Democratic Legislature or vice-versa.

LePage’s one-time praise of alternative methods of expanding health care coverage is unlikely to bear fruit in 2014, an election year, said Mark Brewer, a political science professor at the University of Maine.

LePage is running against Democratic U.S. Rep. Mike Michaud and independent Eliot Cutler next year.

Brewer said Democrats are hoping to take back the governor’s office, and if Michaud were to win, the prospects of a straight Medicaid expansion without a complicated compromise would greatly improve. That gives Democrats a disincentive to deal with LePage.

“If I were in the Democratic leadership, I would want to wait this out and see if we get a new governor,” Brewer said.

But Democrats interviewed for this story did not close the door on a grand compromise.

“I have an open mind,” said Rep. Sharon Anglin Treat, D-Hallowell. “The most important test is whether it would be affordable for people.”

All of the state proposals use Medicaid funding to provide generous subsidies for low-income adults to sign up on the new health insurance marketplace. The federal government is reimbursing states 100 percent of the program’s costs for the first three years and 90 percent in subsequent years.

In Arkansas, the “private option” improves access to health care while also reimbursing doctors at the more generous commercial rate instead of the lower Medicaid rate, said Amy Webb, a spokeswoman for the Arkansas Department of Human Services.

“From our perspective, this was a pretty innovative approach that fit Arkansas,” Webb said. “It was a true bipartisan effort.”

Nearly 60,000 Arkansas residents have already signed up for health insurance with the “private option,” while up to 200,000 are expected to gain coverage under the new plan, Webb said.

Meanwhile, Pennsylvania’s proposal includes a controversial component that would require able-bodied unemployed adults to search for work in order to maintain their free or nearly free health benefits.

Brewer said for LePage, the work requirements in the Pennsylvania plan might be seen as appealing to his right-wing base. Brewer said that since LePage is in a three-way race, he can potentially win with mostly base votes.

Maine Democrats criticized the work requirements element of the Pennsylvania plan.

“I don’t see how those two issues are related,” said Rep. Richard Farnsworth, D-Portland and House chairman of the Legislature’s Health and Human Services Committee. “One has to do with health care and the other has to do with employment opportunities. The two are not associated.”

Sen. Roger Katz, a moderate Augusta Republican who tried but failed to broker a compromise on Medicaid expansion last spring, said he’s hopeful a deal can be reached. He praised the work requirements in the Pennsylvania plan.

“Many members of our party are honestly and philosophically opposed to expansion under any scenario, and I respect their opinions. This is hardly black and white. But I think there is an opportunity to get it done, infuse about a billion dollars into the Maine economy and still honor sound Republican principles. Gov. Corbett’s suggestion of a work-search requirement is but one example,” Katz wrote in an email to the Press Herald.

Katz, who stressed that he was writing as an individual senator and not in his role in Senate Republican leadership, also pointed out that many Republican governors have supported Medicaid expansion.

Treat said the compromises seem to turn something relatively simple – Medicaid expansion – into a complicated workaround that essentially does the same thing.

But Treat said if it provides coverage for 70,000 additional people without insurance, it may yet be worth doing.

Mitchell Stein, policy analyst for the health care advocacy group Consumers for Affordable Health Care, said that even though the Pennsylvania plan is flawed, and there could be legitimate criticisms of other alternative models, at least officials in other states are talking about solutions rather than continuing to fight and tread over the same ground.

“For all of my objections, at least Pennsylvania is doing something,” Stein said. “There doesn’t seem to be that level of engagement here.”

Joe Lawlor can be contacted at 791-6376 or at:

[email protected]

Twitter: @joelawlorph

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