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March 5, 2018

Analysis details costs of implementing voter-approved Medicaid expansion

Photo / James McCarthy Barbara Leonard, president and CEO of Maine Health Access Foundation. The nonprofit foundation, whose mission is to support innovative approaches to improving health and health care systems in Maine, has released a detailed analysis that it funded looking at the impact the voter-approved Medicaid expansion in Maine would have on the state budget through 2021.

A newly completed analysis by Manatt Health provides a detailed summary of the impact the voter-approved Medicaid expansion in Maine would have on the state budget through 2021.

Funded by the Maine Health Access Foundation, the analysis builds on a 2015 report of the impact expansion would have on the state budget and is intended to give Maine lawmakers a solid footing as they figure out how to implement Medicaid expansion approved by 59% of Maine voters last November.

Gov. Paul LePage and the Maine Department of Human Services oppose the expansion, with LePage stating his administration would not implement Medicaid expansion “until it has been fully funded by the Legislature at the levels the Department of Health and Human Services has calculated,” adding the additional conditions that it doesn't increase taxes on Maine families, raid the state’s ‘rainy day’ fund or reduce services to the elderly and disabled.

In its analysis, Manatt Health estimated that approximately 71,500 Maine residents would gain MaineCare coverage under expansion by fiscal year 2021 — including 62,000 adults and 9,500 parents and children who are currently eligible but not enrolled.

The analysis reported that based on the experience of states that already opted to provide expanded Medicaid coverage, Maine could save as much as $25.6 million by 2021 through “enhanced” federal matching funds for some current MaineCare enrollees and by “replacing state funds with federal Medicaid for health care services provided to low-income adults.” That savings would help offset some of the $576.9 million expansion cost projected for 2021, with $489.5 million to be financed by the federal government and $87.4 million financed by the state, the analysis stated.

Net cost to the state in 2021 of the expansion would be $61.9 million, the analysis stated.

“State costs would be lower in the years leading up to state fiscal year 2021, in part because enrollment is expected to ramp up over time,” the analysis stated.

In the ramping-up period that’s expected to occur prior to 2021, the net cost to the state is projected to be $30.5 million in the state’s 2019 fiscal year and $48.59 million in 2020.

“When MeHAF released the 2015 Manatt report we did not yet know the experience of states that had already expanded Medicaid,” MeHAF CEO Barbara Leonard said in a news release accompanying the report. “Manatt now has access to new data to help inform Maine’s implementation of Medicaid expansion. Their updated analysis incorporates this new data from other states and also builds on what was learned from Maine’s prior experience with expansion.”


Manatt Health analysis of expanding Medicaid in Maine

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