By Oka Hutchins
Large nonprofit organizations would face steep tax increases under the LePage administration’s proposed two-year, $6.3 billion budget, while public health organizations would be subject to devastating cuts to program funding. Federal challenges to the ACA also threaten more than 6 million Americans who are receiving subsidies through the federal health exchange, also known as the Health Insurance Marketplace.
Several key issues are on the horizon.
Swapping municipal revenue sharing for nonprofit property tax is a bad deal for Maine communities.
Gov. Paul LePage’s budget proposal would eliminate municipal revenue sharing – currently valued at $62 million – by 2017. In trade, the plan would allow municipalities to impose property tax on nonprofit organizations that hold more than $500,000 in real estate, applied at 50 percent of the local rate.
Colleges, hospitals and research laboratories are among the largest nonprofits in the state and would face the greatest losses. These organizations provide not only community services, but are often the largest employers in their region. Nonprofit jobs are the largest sector of Maine’s economy, contributing approximately $10 billion dollars per year through wages paid, retail and wholesale purchases, and professional services contracts. This contribution is equivalent to 18.9 percent of the state’s gross domestic product, which is greater than the manufacturing and construction industries combined, according to the Maine Nonprofit Association. Hancock County alone has 789 nonprofits, according to 2013 public tax data.
Nonprofit healthcare officials statewide fear that LePage’s proposed shift in taxation would result in a “sick tax,” forcing those in need of medical care to pay higher rates to make up for the financial shortfall created by the property tax payments.
Public health on chopping block
LePage’s budget proposal includes drastic cuts to Maine’s anti-smoking program, among the most successful in the nation. From 1997 to 2013, it reduced cigarette smoking rates among high school students by 67 percent, according to a recent news release from the Maine Public Health Association.
The proposed public health cuts also essentially threaten to defund Healthy Maine Partnerships, a group of statewide coalitions established to address community health issues. Locally, Healthy Acadia, our area Healthy Maine Partnership coalition, would be impacted.
In addition, The Maine Center for Disease Control and Prevention stands to lose funding for about 40 employment positions or 11 percent of its workforce.
The Affordable Care Act
The U.S. Supreme Court has accepted a case this term that will determine whether healthcare.gov can continue to offer subsidized premiums in the 34 states that operate through the federal marketplace, or only in the 17 states that opted to create their own marketplaces/exchanges.
The case will determine if the Affordable Care Act should be interpreted based on language in one section of the law. This section says that subsidies can be authorized “through an Exchange established by the State.”
In other sections of the law, federal exchanges/marketplaces are authorized to offer subsidy. The intention of the law always was to make subsidies available to all states. Without subsidies, coverage would become unaffordable for more than 6 million people, enrollment could decline, and the viability of the health law would be threatened. If subsidies were invalidated, political pressure would be high for states utilizing the federal marketplace to shift to state exchanges or pursue workarounds to continue receiving subsidy.
Nationwide, 7.1 million have signed up for insurance through the federal marketplace so far, with the end of open enrollment set for Feb. 15. Of the 7.1 million enrollments, 87 percent have qualified for subsidy to make their plans more affordable, according to recent data from the Department of Health and Human Services.
Data on the 17 state-run marketplaces is not yet available.
In Maine, 60,000 have signed up for health insurance plans so far – a 34 percent increase over last year – with a few weeks still left to go. The marketplace, while not affordable for everyone, has made health coverage attainable for many in our community for the first time in their adult lives.
Without Medicaid expansion, however, many people in our state fall into a coverage gap where they earn too little to qualify for subsidy on the marketplace and do not qualify for Medicaid (MaineCare). This gap exists because of a Supreme Court ruling making Medicaid expansion voluntary. States that have chosen to reject expansion, as Maine has, offer those in their states with the lowest incomes no option to purchase affordable coverage.
Oka Hutchins is the public affairs officer at Mount Desert Island Hospital in Bar Harbor.
On Thursday, Feb. 5, Mount Desert Island Hospital President and CEO Art Blank will host a free Legislative Advocacy Breakfast at the Atlantic Oceanside in Bar Harbor from 7:30 a.m. to 9:00 a.m.
The discussion will focus on issues that have a direct impact on our community within Gov. LePage’s proposed state budget and the Affordable Care Act.
All are welcome and encouraged to attend. To RSVP, please contact Oka Hutchins at 460-3610 or [email protected]