AUGUSTA, Maine (AP) -- The Obama administration has rejected Republican Gov. Paul LePage's plan to cut health care coverage for more than 20,000 low-income Mainers but left intact provisions approved by the former GOP-controlled Legislature that'll eliminate benefits for another 12,600 residents.
The administration denied Maine's request to eliminate Medicaid coverage for Maine parents who make between 100 percent to 133 percent of the federal poverty level and to drop coverage for 19- and 20-year-olds, changes that combined would have eliminated coverage to more than 20,000 people.
But it granted permission to reduce coverage under the Medicare Savings Program and eliminate coverage for parents making between 133 percent and 150 percent of the poverty level. That will mean a loss of Medicaid coverage for about 12,600 people and savings program benefits for 2,600 people.
Another 8,000 seniors and disabled people would see their savings program benefits reduced, according to the Maine Department of Health and Human Services.
U.S. Rep. Chellie Pingree, who crossed swords with LePage over the cuts, said Tuesday she was pleased the federal government rejected the full extent of the Medicaid reductions.
"The Obama administration did the right thing in requiring that coverage be continued for many needy Maine families," Pingree, D-Maine, said Tuesday in a statement. "Especially in this weak economy, now is not the right time to pull the rug out from under people who are struggling to get by."
The cuts, adopted last year by lawmakers, were originally expected to go into effect Oct. 1, but the federal review took longer than expected, despite a lawsuit aimed at speeding up the process. When implemented, the scaled-back reductions will save $4 million of the $20 million originally projected.
The LePage administration contends that Medicaid, which serves 361,000 Maine residents, has grown faster than the state's ability to fund it. And reductions in federal aid have increased the state's share of the costs, Maine DHHS Commissioner Mary Mayhew said Tuesday.
Mayhew said she was pleased that the Obama administration acted upon the state's request "but clearly disappointed that they didn't approve the entire plans to allow the state the necessary flexibility to comprehensively manage the state's Medicaid program."
The state currently has a backlog of 700 people with developmental disabilities who are awaiting Medicaid services, so it's important for the state to be able to make adjustments to ensure the safety net is catching those with the greatest need without increasing the overall budget, she said.
"The irony for this administration is that this country has been listening to the federal debate around the challenges of the fiscal cliff and the growing national debt. And yet, this decision fails to acknowledge the financial challenges confronting this state," she said.
Maine Equal Justice Partners, a nonprofit legal aid organization that advocates for low-income Mainers, accused the LePage administration of making policy choices that contribute to the budget shortfall, then using the shortfall as an excuse to scale back the state's Medicaid services.
"There were better alternatives that the governor ignored in his pursuit for this outcome," said Sara Gagne-Holmes, the organization's executive director.
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