"Our typical (MaineCare) resident is a woman in her early eighties with advanced dementia and no family members or none that are able to assist her," said Meghan McLaughlin, administrator for Woodlands Assisted Living of Rockland, a dementia and Alzheimer's residential facility for elderly that houses 36 residents. some of whom rely on MaineCare funds.

McLaughlin said one woman exemplifies the need for MaineCare for assisted living residents.

"She has no home, no savings, no assets. Without MaineCare, she would be homeless."

Residents at Woodlands who are on MaineCare, are evaluated by the state to determine how much they pay. Their contribution is based on a sliding scale, depending on their income or assets. Twenty Woodlands residents rely almost exclusively on MaineCare, the health care program for the poor that is funded by state and federal Medicaid funds, to pay the bill.

Governor LePage's proposed supplemental budget, which was introduced December 6, is being aired in three days of public hearings this week in Augusta. It attempts to address a $221 million shortfall in the Department of Health and Human Services (DHHS) budget by cutting MaineCare progams.

One of the cuts is a fatal blow to PNMI (Private Non-Medical Institutions) funds which pay for assisted living services for low-income elderly and disabled who are unable to live at home but who do not require more expensive nursing home care.

"It will be a disaster if these budget cuts go through," said McLaughlin, who is a registered nurse as well as an administrator. "These are frail and elderly people. It will be horrible for them. And where will we find new homes for 20 people with dementia?"

Chad Cloutier of Davis Long Term Care, which is headquartered in Rockland but runs 11 assisted living facilities around the state, said he finds no reason to panic that elderly people will be thrown out on the street.

"We just don't feel that the DHHS would make a decision that would affect us like that," said Cloutier. Most of the 400 residents at Davis Long Term Care facilities are supported by PNMI-MaineCare.

Cloutier said he personally supports the proposed budget cut package, overall, but says the money for low-income assisted living will have to come from somewhere.

In essence, the PNMI-MaineCare funding might go away, making a nice fat zero on the balance sheet, but the costs would still be there and the money would have to come from somewhere. But where, if it exists, is Plan B?

DHHS has given no indication of what might take its place, said Cloutier.

"These are not folks who could live on their own with home health a couple of times a week. They have to be, they are the population in the MaineCare system. We can call it something different, or fund it differently, but we have to fund it," said Cloutier.

"I certainly haven't heard anything about a Plan B," said Nadine Grosso, vice president of the Maine Health Care Association, which represents 200 long-term-care facilities across the state, from those with six beds in a converted house to those with up to 35 beds.

And it's likely she would have heard if there was a backup plan. The PNMI-MaineCare funding system has not been without problems and the federal government has taken notice. The Maine Health Care Association has been working with the DHHS throughout the fall to try to address the problems. There was no indication that the LePage administration planned to pull the plug on PNMI-MaineCare.

"To say I was shocked is an understatement," said Grosso.

Grosso said approximately 4,000 elderly and disabled will be without housing or health care, as of June 30, 2012, if the proposed PNMI-MaineCare cuts go through and nothing replaces them.

"There are two issues here, really,"?said Grosso. "There are the 4,000 who will be affected, now, and there are a whole bunch more waiting for care. The numbers are increasing."

Some of those numbers come from people who are still alive when they run out of their own money for elder care, said Bob McKeown, executive director of Quarry Hill Retirement Community in Camden, which currently has 40 people who would be affected by the proposed cuts to PNMI.

"Some of the people pay privately until they spend down their savings, then apply to MaineCare to continue residency," said McKeown.

"We haven't had any indication from DHHS that they are thinking about funding this differently," he said. When family members call McKeown in a panic over the proposed cuts, he suggests they contact their legislators directly.

"They will listen. They will pay attention. They have to," he said.

In case they don't, McKeown has scheduled an early-January meeting with families of residents to update them and try to help with planning.

Putting assisted-living residents in nursing homes would cost more and the plan isn't practical, said Grosso. There aren't enough nursing-home beds in the state.

Using data culled from DHHS, the Maine Health Care Association estimates that it costs the state around $25 a day through PNMI to keep a person in an assisted living facility - a rate they say is 45 percent lower than what would be paid to a nursing home.

"These proposed cuts are considered to be for optional services," said Grosso. "It's pretty hard to see them that way."

In reference to doing away with PNMI, the governor stated that Maine is only one of two states that supports assisted living facilities with PNMI funds.

Grosso said the statement leads people to think that the other 48 states don't fund assisted living facilities for the poor using state and federal matching Medicaid funding.

It simply isn't so, she said. Most states fund assisted living for low-income people with Medicaid, just not specifically through PNMI.

"It's called Medicaid Assisted Living in other states," she said. "About 35 states get a Medicaid waiver from the Feds to do it, but it is the same thing we have: assisted living funded through Medicaid."

Other changes in Governor LePage's proposal include dropping prescription drug coverage for the low-income elderly and broadening the authority of the DHHS to eliminate services to make further funding cuts.
• PART B repeals the requirement that MaineCare cover optional services under the MaineCare program for adults for physical and occupational therapy services provided to residents of intermediate care or skilled nursing facilities, subject to federal guidelines and approval.

• PART C repeals provisions requiring copayments for physical therapy services, occupational therapy services, speech therapy services, podiatry services, chiropractic services, optical services and optometric services which are proposed for elimination subject to federal guidelines and approval.

• PART D repeals the requirement that the Department of Health and Human Services administer the program of medical coverage for persons residing in cost reimbursement boarding homes effective July 1, 2012, subject to federal guidelines and approval.

• PART E repeals the requirement that the MaineCare program provide coverage for adult dental services as an optional service under the MaineCare program.

• PART F reduces the maximum income level for parent and caretaker relatives of a child under 18 from 200% of the Federal Poverty Level (FPL) to the minimum federal requirement (approximately 51% FPL). It also eliminates medical coverage for childless adults between the ages of 21 and 64.

• PART G repeals the elderly low-cost drug program; and repeals the requirement that the Department of Health and Human Services provide prescription drug wrap-around benefits (to people eligible under both MaineCare and Medicare) and pay Medicare Part D premiums for certain individuals receiving benefits from the elderly low-cost drug program.

• PART H amends existing legislation in order to authorize the Department of Health and Human Services to eliminate further MaineCare service provisions if necessary "to comply with state balanced budget provisions." Under current law, further cuts are allowed only when necessary to comply with federal law.

• PART I repeals the MaineCare Basic program.

• PART J repeals the provision authorizing the Department of Health and Human Services to provide prescription drug services for MaineCare members through the Elderly Low-Cost Drug Program.

• PART K eliminates the requirement that the MaineCare program cover optional dental services to adults, subject to federal guidelines and approval.

• PART L gives the Department of Health and Human Services the authority to adopt emergency rules to implement any provisions of the bill over which it has specific authority that has not been addressed by some other Part of the bill.

• PART M reduces the reimbursement rate for critical access hospitals from 109% to 105% and strikes the provision that repealed that method of reimbursement effective April 1, 2012. It repeals the provision that requires the Department of Health and Human Services to phase in a system to reimburse critical access hospitals for inpatient services under the MaineCare program based on diagnosis-related groupings. It repeals the provision that requires the Department of Health and Human Services to phase in a system to reimburse critical access hospitals for outpatient services under the MaineCare program based on ambulatory payment classifications.

• PART N eliminates the transfer of $4,500,000 of net slot machine revenue to the Fund for a Healthy Maine.