Long Overdue Welfare Debt: Paying Maine Hospitals was the Right thing to do

Many Mainers know what it’s like to juggle their bills until pay day arrives, but imagine having to wait four years. That’s what Maine’s 39 community hospitals did: they waited four years to get paid a half-a-billion dollars for Medicaid services they provided dating back to 2009.

Hello, this is Governor Paul LePage.

This week, our administration made good on a promise we made in 2010: we paid the hospitals.

In total, the State owed its hospitals nearly $490 million.

This debt was bad for business – not just for our hospitals, but also for our state.

As the welfare bills went unpaid, many hospitals had to lay off employees and reduce benefits, borrow against lines of credit to meet payroll and other obligations, dip into savings and forgo interest delay payments to local vendors and eliminate services. Capital improvements, such as building additions and renovations, as well as the purchase of new equipment, were put on hold.

As a candidate in 2010, I stood outside of Central Maine Medical Center and said that if I became Governor, I would make paying these bills a priority. During my first budget, we pushed to address the significant welfare debt by paying money owed for years 2004 to 2008.  We also worked to see that a new system for payment was funded—a system that now pays hospitals in real time. 

In January of this year, we took the next step in making good on my promise: we proposed a plan to pay the remainder of the hospital debt that I inherited when I took office.

After lengthy debates and a near impasse at the objection from Democrats to pay these bills, they finally relented. Honestly, it’s not about who gets credit for paying the hospitals, but rather we honor our commitment to pay our bills.

Hospitals do more than heal. They are economic drivers, not just in their communities where they are often the largest employer, but also in our state, where they hire, build, educate and care for our loved ones.

For years, we listened to rhetoric from politicians promising to pay the hospitals—even as they kept fighting to expand Medicaid and accumulate more welfare debt. But actions speak louder than words. This week, we finally did it.

It was, quite simply, the right thing to do.