Bangor nonprofits: Taxing us could generate $3 million, but at what cost?

Posted Feb. 01, 2015, at 5:40 a.m.
BANGOR, Maine — Gov. Paul LePage’s budget proposal to allow municipalities to levy property taxes on large nonprofits could generate more than $3 million in revenue annually for Bangor, according to an analysis by Bangor Councilor Ben Sprague.
This would surpass the city’s projected income from the state’s municipal revenue sharing program — which the governor proposes to eliminate — by nearly $1 million. But nonprofit leaders are cautioning the taxes would have significant social costs, leading to cuts in community services and increased expenses for consumers.
“What’s truly going on is an almost fiscal assault on the state level in the form of the governor’s proposed budget,” Dennis Marble, executive director of the Bangor Area Homeless Shelter, said.
The shelter provides overnight services for roughly 500 residents annually and daytime services for between 1,500 and 2,000, according to Marble.
He said the projected $1,260 per year the homeless shelter would pay the city in property taxes would not have a significant financial impact because the nonprofit already volunteers to pay the city $1,000 annually in lieu of taxes to recognize its reliance on city services.
But, Marble said, the taxes could endanger partnerships the shelter and other nonprofits have formed with the city, in which nonprofits provide services that otherwise would be provided by the government.
“I mean, we deal with a lot of the things that save the city law enforcement from having to deal with it,” Marble said.
“You’re setting up a system in which a certain state level or gubernatorial level agenda is satisfied by making local parties not necessarily fight but struggle to work together,” he said.
On Facebook this week, Sprague posted a breakdown of the 54 nonprofit entities in Bangor he calculates would qualify for taxation under the governor’s proposed budget.
Asked about the post, Sprague said his intent was to bring “transparency and education” to the issue. Overall, he said he is not “not crazy about” the idea of taxing nonprofits and would rather see the state properly fund its municipal revenue sharing program.
“I know something has to be done to ease the tax burden on residents, but a lot of these entities provide services that otherwise would be provided by the government,” Sprague said.
“People need to know what the government is talking about and understand it in order to make informed decisions,” he said.
To calculate the proposed taxes, Sprague obtained from the Bangor Assessing Department a list of assessed property values for all of the city’s nonprofits. He then eliminated the first $500,000 in value for each and applied half the city’s current property tax rate in keeping with the governor’s proposal. Bangor’s current tax rate is $21.80 per $1,000 of value.
The list shows Eastern Maine Medical Center would be hit hardest, with an estimated property tax burden of $973,238 annually.
In a statement, EMMC said it was still working to determine the potential financial impact of the governor’s budget proposal and would work with the Maine Hospital Association, other health care organizations and legislative representatives to address any concerns.
It also cautioned Mainers could see an increase in health care costs under the governor’s proposal.
“Since health care organizations continue to need to cover their costs, a tax that is purported to be imposed on a hospital is in fact a tax on patients,” it said.
The hospital said it invests resources to improve the health of Mainers and assist those who cannot afford the cost. In its last fiscal year, the hospital said its free care and bad debt costs rose by more than $68 million.
Facilities affiliated with Eastern Maine Healthcare Systems, parent company of EMMC, would face tax bills in several Maine cities under the governor’s budget proposal.
At St. Joseph Hospital, which would face a tax burden of $306,106 a year, Mary Prybylo, president and CEO of St. Joseph Healthcare, said they gave $1.5 million in goods, services and donations to benefit the community last year.
They also provided about $4 million in charity health care and had about $11 million in bad debt, she said, leaving the hospital with a narrow operating margin of less than 1 percent last year, after paying about $2 million in state taxes.
That’s short of the 3 to 4 percent operating margin the hospital strives for to reinvest in capital needs.
“Any added expense is just going to narrow our margin to a miniscule if not negative amount,” Prybylo said.
The Maine Hospital Association said it was “disappointed” to see a proposal that would tax nonprofits, including all of Maine’s 36 nonprofit hospitals.
Those hospitals provided a combined $125 million in charity care last year, according to the association. They subsidize public health insurance programs with more than $140 million annually, it said.
According to the association, aggregate operating margins at Maine hospitals in fiscal 2014 were just 0.5 percent, and there was no aggregate operating margin for the hospitals in fiscal 2013.

by Reuters

WASHINGTON — Three top U.S. Republican lawmakers, including Rep. Paul Ryan, R-Wisconsin, will lead an effort to craft new health reforms that could replace the Affordable Care Act, party officials said on Friday.
House leadership said Ryan, the former Republican vice presidential nominee, would join Energy and Commerce Committee Chairman Rep. Fred Upton, R-Michigan, and Education and the Workforce Committee Rep. John Kline, R-Minnesota, as part of a new health care working group.
The three and their respective committees will attempt to produce “a thoughtful replacement strategy” that could one day accompany Republican efforts to repeal the Affordable Care Act. The Republican-controlled House, which has voted numerous times to overturn the health care law, is expected to do so again next week.
Republicans have failed in the past to reach consensus on legislation to replace the Affordable Care Act and analysts say that stubborn differences within the party persist.
House Republican leader Kevin McCarthy of California said a new plan could also provide a “patient-centered” contingency in the event the U.S. Supreme Court eliminates federal subsidies used to help people afford private coverage sold through a federal insurance exchange that covers 37 states.
The case, known as King v. Burwell, is due for oral arguments in March with a ruling likely in late June. Plaintiffs contend that the law makes the subsidies available only through state-based exchanges that operate in 13 states and Washington, D.C. The federal government and health care reform advocates say the assertion is unfounded.
More than 10 million people have gained health coverage under the Affordable Care Act, according to researchers. But if the court finds for the plaintiffs, studies show that millions of Americans could lose their private insurance and rejoin the ranks of the uninsured.
Republicans in the Senate have also talked about a potential “patient-centered” blueprint that would scale back government financial support for consumers and make policyholders responsible for more of their medical bills.

'IT'S A LIFESAVER 
FOR PEOPLE MY AGE:'

How 9 small towns are leading the way to help elders live at home

BY ERIN RHODA, BDN MAINE FOCUS EDITOR

All around Margaret Staples’ home in Brooklin are oil paintings of the sea, their blues bright. She is an artist with a fondness for the scenery around her — the tall spruce trees in her backyard and nearby islands with names like Goose, Gander, Tinker, Flye, Chatto and Babson. She is nearing her ninth decade — “I can’t believe it,” she said — and has lived on the Blue Hill peninsula for much of her adult life. Her husband died in 1975, but members of her family remain. She can’t imagine leaving.
The house where she lives was built on the spot where the previous one burned down. If fire can’t move her, age won’t either. She had the new house built to her size, with the windows lower to the ground, so she can see outside. Sometimes she spots deer nibbling her bushes or a cat sneaking across the rocky soil.
She knows people in assisted living, and they aren’t really happy. In her home, she sits by the wood stove — “There’s nothing like a good wood stove,” she said — and grows basil in pots on her windowsill.
Even though her mind is young, she said, her body isn’t able to keep up all the time. Her knees are stiff and sore, making it difficult to get up and down stairs, or walk up the ramp to her house. She’s able to drive, but it leaves her tired. Several times she slipped on her rugs and fell as she rushed to answer the phone. It’s no longer easy to carry a bag of groceries.
So when her neighbor told her about a new initiative in the area to help older residents maintain their independence in their homes as long as possible, she said she was “thrilled to pieces.”
The initiative, called At Home Downeast, is a program of the nonprofit Washington Hancock Community Agency, but it had its beginning in living rooms around the peninsula with regular people talking about how to help their aging family members, friends and neighbors. It has been operating just three years — since Feb. 1, 2012 — but has drawn about 80 volunteers who serve about 60 paying elder members.



So How's That Insurance Marketplace Working for You? Four Mainers Weigh In 

  JAN 27, 2015

It's been more than a year that Mainers have been able to buy insurance on the Affordable Care Act's online marketplace. The goal of the marketplace, say advocates, is to provide affordable insurance and increase access to healthcare. But what is it really like to use these plans? 
Patty Wight reports on the experiences of four Maine residents who purchased insurance policies through the Affordable Care Act marketplace.
Patty Wight spoke to four Mainers who enrolled last year, and each had a different experience.
Stephanie LaPlante is a list-maker. And that makes her very good at her job. "I am the foreman of a horse stable with 21 horses."
Her job is to make sure essential daily tasks get done at Meadow View Equestrian Center in Readfield. Today, stuffing snack hay into individual bags for each horse is on that list. 
Last year, LaPlante's list of personal to-dos was buy health insurance. She turned 26 and was taken off her parents' plan - and that terrified her.
"Large animals - horses - they can be kind of unpredictable," she says. "Usually they're really great, but you can never be 100 percent sure 100 percent of the time, and I just wanted to make sure I had a back up in case something happened."
LaPlante also needs prescription allergy medication. So she checked out the online insurance marketplace and bought a silver level plan, where her allergy meds cost only five bucks.
 Even while juggling college and car loan bills, LaPlante says her insurance plan is affordable. "Incredibly affordable!  I wouldn't have health insurance now if I didn't have this."
While LaPlante wanted insurance as a safety net, others who've signed up need coverage to manage chronic conditions. Heidi Perkins is a freelance documentary film editor who also has Type 2 diabetes.  After being laid off in 2013, she was without insurance for six months, before the marketplace opened.  
"It's a lifesaver," she says, "because I'm not the best monitor of myself when it comes to the diabetes."  
Perkins says regular appointments with her doctor keep her diligent about her diet. Her marketplace insurance also allows her to continue her career in film as a freelancer.  Perkins was even able to get her premiums reduced mid-year when a work project fell through, which reduced her income.  

Maine Med Opens 24-Hour Pharmacy 

  JAN 26, 2015 

As of 7:00 am Monday, the state's only 24-hour pharmacy opened at Maine Medical Center.  
Senior Director of Pharmacy Brian Marden says the goal is to improve patient outcomes and reduce re-admissions, in part by providing a convenient way to get important medications.
"Spending time with people too - we have three consult rooms in our pharmacy that are available for conversations between patients and families and our pharmacists so that they can do the appropriate education and spend time answering questions that people may have," Marden says.
The National Alliance of State Pharmacy Associations finds that about 75 percent of patients don't take medications as directed, and some never fill prescriptions. The Maine Med pharmacy is open to both patients and the general public.

Purchasing insurance across state lines doesn’t work and causes more problems than it can possibly solve 

By James Fieseher, M.D.
Concord (N.H.) Monitor, Jan. 29, 2015
In American politics, ideology often supersedes reason. We don’t have to look any further than in the New Hampshire state Legislature.
State Sen. Andy Sanborn, a Bedford Republican, is sponsoring a bill that would allow New Hampshire residents to purchase health insurance across state lines. He argues that giving New Hampshire citizens out-of-state options will increase competition and lower the cost of health insurance. This works for purchasing automobile and life insurance, so why wouldn’t it work for health insurance?
On the surface, this sounds reasonable, but in fact it is an expression of ideology.
When submitting a claim for auto or life insurance, the insurance company writes a check and the consumer (usually) has the option of choosing where to go to consummate the deal. But with health insurance, the insurance company builds the network and determines which hospitals and which providers are available to the consumer. In other words, a New Hampshire citizen may be able to purchase a cheaper health insurance plan in Alabama, but he might have to travel to Alabama to see a doctor or obtain emergency room benefits.
The only state to actually pass legislation that would allow the purchase of out-of-state health insurance, Georgia, found the experiment to be a total failure. No out-of-state company wanted to participate because it didn’t have the network of doctors and hospitals and couldn’t afford to pay out-of-network fees.
But that’s just the tip of the iceberg. Anyone who has ever had to work with a health insurance company is aware of problems that seem to crop up on a regular basis: prior approvals, pre-existing conditions, out-of-network providers and so on. The Affordable Care Act has helped to reduce some of these, but not all and not well. When that happens, the state insurance officials step in to sort things out.
New Hampshire doesn’t have the budget to oversee out-of-state health insurance companies, which means that New Hampshire residents would have to rely on insurance regulators from other states (where they are not taxpayers and have no electoral voice) to address out-of-state health insurance problems. This would eventually result in greater federal involvement in our health care.
All of this overlooks the fact that the cost of insurance premiums is based upon the overall health of the risk pool – those folks who are enrolled in the policy. As the number of members in the risk pool gets larger, premiums decrease as the cost of care for the less healthy is spread out over a greater number of policyholders. Mr. Sanborn may not like to purchase a plan that covers maternity care, but by doing so, his risk pool is larger and the cost of his health premium is reduced.
The problem is that the reverse is also true. If Mr. Sanborn’s bill were to become law and New Hampshire residents were willing to travel out of state for their health care, then the price of health insurance in New Hampshire would increase as the risk pools diminish. Since we are a state with a relatively small population, then even the loss of a few thousand health insurance members would cause a large rise in the cost of insurance premiums – the opposite effect that Mr. Sanborn intended.
During the New Hampshire primary campaign in 1999, George W. Bush proposed the exact same concept Mr. Sanborn is sponsoring. Yet, despite having a Republican Congress for six years, President Bush never carried through with the idea – because he realized it wouldn’t work.
Mr. Sanborn’s bill makes sense only in the abstract world of ideology. In practice, it has been shown to be costly and unworkable in the only place that has ever tried it.