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Maine's Projected Medicaid Deficit May Be Overblown Due to Budgeting Glitches

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A projected $120 million budget deficit for Maine's current fiscal year may be the result of a series of technical budgeting miscalculations, according to a Portland Press Herald report.

The budgeting miscalculations can be attributed to problems with a new claims processing system, a loss of federal funds that wasn't accounted for in the calculation and a failure to budget for increases in federal Medicare premiums.  Leaders in the administration will present a report on the deficit today to the Legislature's Appropriations Committee.

The $120 million budget deficit projected for this fiscal year has led to a financial emergency that Gov. Paul LePage wants to address by making significant cuts to MaineCare, which he says has grown nearly 80 percent in the past decade. According to the report, increased MaineCare enrollment in fact accounts for just $6.5 million of the $120 million shortfall.

While enrollment growth has continued in 2011 and is contributing to the projected deficit, the growth does not affect the deficit in a significant way, according to the report. Most of the deficit is due to inaccurate assumptions built into the state budget, many of which were carried over from years past.

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