Health and social services groups are urging state lawmakers to reinstate cost-of-living adjustments for direct care workers, which the Mills administration has proposed suspending to help cover a funding shortfall.
Health and Human Services Commissioner Sara Gagne-Holmes told members of two legislative committees on Thursday that difficult decisions will have to be made in order to close a roughly $118 million shortfall in the state's Medicaid program, known as MaineCare. She said the Mills administration first sought to minimize impacts, in part, by rolling back funding for programs that are brand new or not yet fully implemented.
"We did not arrive at the budget proposals lightly nor were they without heated debate internally," Gagne-Holmes said during a budget briefing and public hearing. "But ultimately, the budget proposals before you today maintain core supports and services for Maine people across the department."
The Mills administration has attributed the deficit to a combination of factors, including higher sustained enrollment in MaineCare and rising care delivery costs. The nearly $120 million shortfall is just for the remainder of the current fiscal year, which ends on June 30. The $11.6 billion, two-year spending plan proposed by Gov. Janet Mills recommends both cuts in some areas and additional investment in others.
One cost-saving measure proposed by Mills is to cancel planned cost-of-living pay raises to so-called "direct care workers" who look after Mainers in nursing homes, hospitals, assisted living facilities and at home. Mills and lawmaker approved the COLAs as a way to boost pay and address a longstanding workforce crisis within the direct care industry.
But several community service providers say those COLAs were supposed to kick in on January 1, which is further complicating their own budgets.
Mark Eves, the executive director of Woodfords Family Services, which runs group homes and offers other services to people with intellectual and developmental disabilities, said having to pay those promised pay raises will cost his organization more than $400,000 over the next six months. That will only compound an anticipated budget gap this year, he said.
"The decision to close programming, shrink programming, those conversations are going on right now," said Eves, a former speaker of the Maine House. "We don't take them lightly. We know that is going to be, for the adults that we serve a loss of home, a loss of support from the direct care staff . . . and a loss of the community that they have been in."
Catherine Thibedeau, executive director of the Orono-based Independence Advocates of Maine, which works with people with disabilities, said the Mills administration and the Legislature made significant progress in recent years through MaineCare rate increases and paying direct care workers 125% of the minimum wage. Thibedeau said that has allowed many direct care workers to move closer to a wage that can support their families.
"And so this halting of the COLA now and halting of the COLA in the biennial budget is really an incredible setback and I anticipate that we will go back to the crisis mode that we were in at the height of the pandemic and pre-pandemic," Thibedeau told members of the Appropriations and Financial Affairs Committee and the Health and Human Services Committee. "So I urge you, I ask you to please consider restoring the cost-of-living adjustments to MaineCare rates."
Lawmakers are expected to continue working on the mid-year budget changes over the next several weeks. They will then turn their attention to the bigger political and financial challenge of crafting a two-year budget by July 1.
