December 22, 2002

The following op-ed piece ran in the Maine Sunday Telegram, December 22, 2002

Maine needs help to improve Medicare reimbursements

By SARA BURNS and BOB DAIGLE

Only four states get treated more poorly than Maine when it comes to Medicare reimbursement to hospitals by the federal government. For every dollar of care provided by hospitals to Medicare beneficiaries, Maine hospitals are reimbursed 88 cents. Some states, on the other hand, get reimbursed as much as $1.09 for every dollar of cost.

The Medicare shortfall forces health care charges higher as hospitals are forced to shift un-reimbursed costs to those who can pay. Chronic low Medicare reimbursement represents a hidden federal tax on everyone who has health insurance or who self-pays their hospital charges. It is a key reason why health insurance premiums keep going up in our state.

Under-reimbursement of hospital services by Medicare is also a crippling problem for businesses in Maine who are struggling to provide health insurance to their employees. It is crippling because if a business can't provide a good health insurance benefit, it can't recruit and keep good employees. And increasing health care premiums cause a business' products and services to be more expensive than its competitors in other states.

When Congress convenes in January, Maine's Senator Olympia Snowe will be in a critical position to demand that Maine receive fair treatment from the federal government on Medicare reimbursement. As chairperson of the Senate Small Business Committee and Chair of the Health Subcommittee of the Senate Finance Committee, Senator Snowe will be able to champion Maine's cause for improved Medicare reimbursement, not just for hospitals but for all health care providers in Maine who are systemically underpaid by Medicare.

Maine Employers for Affordable Health Insurance (MEAHI), a group of twenty Maine business leaders who also serve as trustees of their community hospitals, is focused solely on improving Maine's Medicare reimbursement rate. We believe it is central to controlling health care costs and stabilizing insurance premiums in Maine. As co-chairs of this new group, we are asking our full Congressional Delegation to make improved Medicare reimbursement for Maine a top priority when they go back to Washington next year.

The federal government underpaid Maine hospitals $115 million in 1999 (the latest year for which the federal government has statistics). Since Medicare patients consume 45 percent of all hospital services in Maine, this underpayment forces other hospital users to pay more for their services. This is a problem for Maine today and it will become catastrophic in the future.

Why catastrophic? Today, Maine has the 4th oldest population in the nation, with a correspondingly high percentage of Medicare beneficiaries. That percentage of Medicare beneficiaries is expected to become the highest of any state within two decades, unless demographic trends change dramatically. If Maine does not receive fair treatment from the federal government on Medicare reimbursement, the burden caused by inadequate Medicare reimbursements on our health care system will grow ever larger, with fewer and fewer patients with health insurance (or self-pay) being forced to pay even higher costs for their health care.

In her recent meetings in Maine with business leaders, Senator Snowe heard repeated stories of how health insurance was becoming unaffordable for businesses owners to provide as a benefit to their employees. She pledged to help small businesses be heard as the Bush Administration crafts its economic stimulus package.

We are encouraging Senator Snowe to use her new Senate position to do everything possible to help her home state receive more Medicare support from the federal government. Maine does not deserve to be among the states that receive the lowest reimbursement ratio from Medicare. It is simply unacceptable that Maine, with among the highest Medicare-eligible populations, should be reimbursed at a rate that is one of the lowest in the nation.

If Maine received full Medicare reimbursement, we estimate that hospital charges could be decreased by 12 percent. This would not solve the health care affordability crisis in Maine but it would be an important step in the right direction. Senator Snowe, and the entire Maine Delegation, we look to you for your leadership on this issue.

Sara Burns, co-chair of Maine Employers for Affordable Health Insurance is President of Central Maine Power Company and trustee of MaineGeneral Health. Bob Daigle, co-chair of MEAHI, is president of Camden National Bank and a trustee of Northeast Health.