Study: Maine Could Save $26 Million by Expanding Medicaid

Apr 16, 2015

The state of Maine could save $26 million dollars in 2016 if it expanded Medicaid, according to a new study.

A New York-based consulting firm based its findings on the experiences of eight states that already expanded Medicaid under the Obama health care law. Proponents of increased health care coverage hope the study will reignite the expansion conversation in the state, but members of the LePage administration say the issue has already been settled.

The Maine Health Access Foundation commissioned the report, which examines the effect of Medicaid expansion on the state's budget for 2016. President and CEO Wendy Wolf says the most compelling finding is that Maine can afford to provide health coverage to people who can't afford it on their own.

"And we can do so in a way that brings additional revenue into the state, and provides additional revenue in the state budget," she says.

Researchers with consulting firm Manatt Health Solutions looked at publicly available data on Maine's health care costs, and compared that to data from eight states that expanded Medicaid in 2014.

"There are two big buckets of savings," says Deborah Bachrach, one of the report's authors. She says Maine currently covers about 40 percent of the health costs for disabled, pregnant and medically needy individuals. Under expansion, the federal government would pick up 100 percent of the tab. Maine also provides mental health and substance abuse treatment for the uninsured. But many of those individuals would gain insurance coverage under federal dollars if the state expanded Medicaid.

"For example, we looked at a budget of just over $40 million, and we estimated that perhaps as much as 50 percent could be withdrawn because the individuals that are relying on this service would have health insurance — they would have MaineCare," she says.

The Manatt study also found it would cost the state about $17 million to implement and manage Medcaid expansion, though that's offset by an estimated $43 million in savings and extra revenue. But Department of Health and Human Services Commissioner Mary Mayhew isn't swayed by the results.

"We don't need to study what we've already experienced," she says. "That when you expand a program as Maine did, many, many more enroll than are ever estimated, and the costs are far greater. And that is certainly what Maine has been digging out of for more than a decade."

While Wolf hopes the study will spark a conversation about the options Maine has to expand Medicaid, Mayhew says the LePage administration is firm in maintaining its current course.

"We just had the credit rating agency come out and provide a positive outlook for the state, and attribute it to the management of the Medicaid program," she says.

While Medicaid expansion may be off the table, Mayhew says the state is committed to reprioritizing the Medicaid program to effectively support the elderly and disabled.