Estimated Budget Impacts of Expanding MaineCare

Prepared for the Maine Health Access Foundation

In November 2017, Maine voters approved a referendum to implement expansion of MaineCare under the Affordable Care Act (ACA) to adults with incomes up to 138 percent of the federal poverty level. In a new memo and presentation deck prepared for the Maine Health Access Foundation, Manatt Health updates and refines a budget analysis prepared by Manatt in April 2015.

Under expansion, approximately 71,500 individuals are expected to gain MaineCare coverage by state fiscal year (SFY) 2021. Prior to the application of any savings or revenue offsets, the SFY 2021 cost of expansion is an estimated $576.9 million, with $489.5 million financed by the federal government and $87.4 million financed by the State of Maine. However, it is anticipated that the State would be able to offset a considerable portion of its costs by accessing enhanced federal match for some current MaineCare populations and by replacing state general fund spending on certain healthcare services with federal Medicaid funds. In addition, as hospitals’ revenues increase with the number of people covered, the state may see increased hospital tax revenues. By SFY 2021, state savings and revenues are estimated at $25.5 million, for a net state cost of expansion of $61.9 million. State costs would be lower in the years leading up to SFY 2021, in part because enrollment is expected to ramp up over time.

Click here to read the full memo and here to see the accompanying slide deck presenting the results of Manatt’s updated analysis.

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