The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Maine's Fiscal Future Tied to Medicaid Expansion

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On November 7, 2017, Mainers will head to the polls to vote on four ballot measures, including Question 2, which would expand Medicaid in the state to cover able-bodied adults without children whose income is equal to or less than 138 percent of the federal poverty line.  In an off-year election, not many will vote; one prediction estimates turnout at 20 percent.  That’s a shame, because those who vote will help determine the fiscal future of the state. 

Maine, thanks to the steadfast opposition of Governor Paul Le Page, did not expand Medicaid under Obamacare.  It is the only state in the Northeast not to have taken this step.  After the legislature failed to override the governor’s five vetoes of expansion, proponents succeeded in placing the issue on this year’s ballot.

If voters choose to expand Medicaid by adopting Question 2, the state is likely to experience déjà vu.  In 2002, under then-Governor Angus King, Maine received permission from the federal government to expand Medicaid to cover those making up to 125 percent of the federal poverty line.  Proponents argued that it would decrease the state’s uninsured population, generate economic growth, and improve healthcare outcomes.

The promised outcomes did not transpire.  Many Mainers who had private health insurance switched to Medicaid, a key factor in the 78 percent growth in enrollment since 2002.  The state’s budget is getting crowded out by Medicaid, which now accounts for 21 percent of all spending, an increase of 45 percent over the last decade.  Yet, poverty rates and life expectancy in Maine have barely budged.  

Population growth is stagnant; from 2014 to 2015 it went down.  The median age in Maine is the highest in the country, in part due to a net outmigration of 1,872 Maine taxpayers under the age of 26 between 2012 and 2015, according to the IRS.

Maine can look south to Massachusetts to see what happens when a state expands Medicaid; the program eats up 40 percent of the budget.  

In a July 2017 waiver request to the federal government, the Massachusetts Office of Medicaid described the dramatic degree to which Medicaid costs had increased, even as health care coverage was universal, population growth was stable, and unemployment remained low.  “This is explained, to a considerable degree, by reductions in the percentage of residents covered through commercial insurance,” the office said. 

Massachusetts has requested waiver after waiver over the years, and has struggled to reform the program toward sustainability.  Median annual household income in Massachusetts is $62,859; Maine’s is $46,033.  If a wealthy state like Massachusetts cannot afford its Medicaid expansion, Maine will never be able to bear that cost.  An expansion of Medicaid to 125 percent of the federal poverty line crippled Maine’s budget; raising it to 138 percent would bring disaster. 

Maine needs more high-paying jobs and economic growth, not more spending.  When state budgets become structurally unsound, the only options are tax increases or reduced government services of a lower quality.  Governor Le Page understands that.   A state consumed by Medicaid spending will not attract more jobs and people.  Mainers should keep these facts in mind when they head to the polls on November 7. 

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