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New Maine Economic Study: Bush Medicare Cuts Undermine State and Local Economic, Jobs Base

Besides Cutting Maine Seniors' Medicare Benefits $3.9 Million in Year Ahead, State Projected to Lose $8.5 Million in Economic Activity, $4.1 Million in Lost Wages

WASHINGTON, June 5 /PRNewswire-USNewswire/ -- As Congress returned to Washington this week following its Memorial Day district work period, the Maine Health Care Association (MHCA) released a new analysis finding the Bush Administration's proposed $770 million Medicare Part A national nursing home funding cuts will not only cost Maine seniors $3.9 million in essential health benefits, but cause the state to lose $8.5 million in total economic activity and $4.1 million in lost wages. MHCA officials are in Washington this week lobbying the Maine congressional delegation on long term care financing and other related issues.

According to the new study, prepared by the American Health Care Association (AHCA), the following schedule illustrates the direct, indirect and induced impact of the Administration's pending $3.9 million Medicare cut on Maine, scheduled to go into effect this summer:

Direct Indirect Induced TOTAL

Business Activity 3,961,967 977,981 3,577,126 8,517,074

Impact ($)

Income Impacts ($) 2,387,872 300,183 1,399,291 4,087,346

Direct Effect represents the impact (e.g. change in employment or revenues) for the expenditures and/or production values specified as direct final demand changes.

Indirect Effect represents the impact (e.g. change in employment) caused by the iteration of industries purchasing from industries resulting from direct final demand changes.

Induced Effect represents the impacts on all local industries caused by the expenditures of new household income generated by the direct and indirect effects of final demand changes.

Total Impact is the sum of the direct, indirect and induced effects.

Labor Income is the sum of employee compensation and proprietary income.

Economic Impact Analysis: Impact Analysis for Planning (IMPLAN) software, Minnesota IMPLAN Group, Inc., 2006 data.

Copyright, American Health care Association, 2008

"The Bush Administration's proposed Medicare cuts not only threaten Maine seniors' access to quality care throughout our state, but will also negatively impact our state and local economy," stated Rick Erb, President and CEO of MHCA. "The Medicare cuts represent a 'lose-lose' proposition because Maine seniors' care needs will be shortchanged and our state economy will be damaged at a time we can least afford it."

The Maine long term care leader said the Medicare regulations being changed by the Bush Administration are currently helping facilities throughout the state successfully serve higher acuity patients -- at a lower cost than other settings. "Considering the fact existing Medicare policy is beneficial to both patients and the taxpayers who finance the program, it is especially curious this regulatory policy change is being pursued by the President's health care team," Erb stated. Current policy, he added, saved Medicare $709 million in 2006 alone nationally, according to an independent analysis by Avalere Health, LLC.

"It is our intent to ensure during our visits on Capitol Hill that the Maine congressional delegation is well informed about the significant damage the Administration's Medicare changes will incur both to Maine's long-term care residents, and to our state and local economies," Erb continued.

Susan Feeney, Vice-President of Public Affairs for AHCA, said rural communities in states like Maine have higher than average numbers of elderly citizens, and noted that beyond serving the growing complex care needs of elderly seniors, rural facilities are a major local employer, and a significant part of the local economy. "Front line caregivers throughout Maine, and across America, make a key difference in patient care - and the Bush Administration's plan now set to go forward presents a clear and present danger to caregiver jobs, to vulnerable seniors' care needs, and to the health and well being of Maine's economic and jobs base."

Wanda Pelkey, CFO for First Atlantic Health Care, which serves seniors in many rural communities across Maine, said, "The Bush Administration's single-minded effort to implement regulatory-driven Medicare cuts will undercut care in Maine's rural communities -- which have special challenges -- and add to facilities' already onerous challenge of contending with rising wage rates and ever-higher energy prices. The Bush Medicare cuts will not only place the jobs of key front line caregivers in jeopardy - the very direct care staff that make a difference in patient outcomes -- but further undermine facility quality improvement initiatives that are making a positive difference."

If you need further information, please contact Rebecca Reid at 410-627-1128 or

SOURCE Maine Health Care Association (MHCA)
Copyright©2008 PR Newswire.
All rights reserved

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