$235 Million MaineCare Deficit

March 13, 2009
GOP Leaders Appalled by News of $235 Million MaineCare Deficit
AUGUSTA – Republican legislative leaders reacted sharply today to the news that the state’s MaineCare program has a new budget deficit of $235 million for this fiscal year, which ends June 30. Just six weeks ago, the Legislature closed the supplemental budget, which cut $140 million from the current budget. There was no public disclosure until today that this huge new problem had arisen within MaineCare, as the state calls the Medicaid program, which provides free medical and dental care to low-income residents.
“This is extremely troubling news,” said Senate Republican Leader Kevin Raye. “It is also very disturbing that this information was unveiled on a Friday afternoon, less than 72 hours after the governor’s State of the State address, in which there was no mention of a gaping shortfall. It is doubtful that the administration became aware of a $235 million hole only in the last few hours, and raises serious questions about their professed commitment to transparency.”
State Rep. Josh Tardy, leader of the House Republicans, called the shocking revelation “one of the biggest stories in Augusta in the last few years. The problem stems from overutilization of MaineCare, probably due to the recession,” he said. “The most disturbing fact is that we were not given any cautionary advice about this in January, when we took up the supplemental budget. We have known for months that a Brinks truck was going to arrive in the form of the stimulus funds. But it’s hard to believe that the administration did not know that we were $235 million out of balance with just three months to go in the fiscal year.”
State Sen. Peter Mills, a member of the Health and Human Services Committee, was in the committee room when officials of the Department of Health and Human Services (DHHS) dropped the financial bombshell in the form of a fact sheet about the distribution of stimulus funds. “This comes just three days after the governor’s State of the State address,” he said. “By misrepresenting the real state of the state, it fails to prepare people for the sacrifices we will have to make. I’m also disturbed that the administration didn’t disclose this until a Friday afternoon, during a quiet time in the news cycle.”
Rep. Sawin Millet, the House Republican lead on the Appropriations and Financial Affairs Committee, said administration officials should have noted the likelihood of program overutilization in January. “The key is that we were not told, even six weeks ago when we closed the supplemental budget, that a cost overrun of this magnitude was anticipated.” According to the DHHS fact sheet, he said, the $235 million hole will be followed by overruns of $90 million in 2010 and $65 million in 2011, at current federal matching rates.
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