Northern Light Health, the largest hospital system serving central and northern Maine, is taking a strong stance against the bill as it struggles to recover from years of financial setbacks<\/a>. The health system lost $15 million<\/a>\u00a0last year.<\/p>\n \u201cI\u2019m afraid of a health care collapse,\u201d Northern Light President Dr. Guy Hudson said, referring to what would happen if the bill passes.<\/p>\n People on both sides of the debate agree that health care affordability is a major problem in Maine, and the proposal highlights the particularly dire situation facing patients in the state and many of the hospitals that serve them. It\u2019s unclear to what extent the proposed cap could improve Maine\u2019s struggling health care system.<\/p>\n The Maine Office of Affordable Health Care brought forward the proposal after identifying<\/a>\u00a0hospital services as the largest portion of health care spending in Maine, outpacing prescription drugs and other spending areas.<\/p>\n \u201cIf we want to meaningfully improve affordability and change the trajectory for Maine people, we really need to get at those underlying costs,\u201d Meg Garratt-Reed, the agency\u2019s executive director, said.<\/p>\n The nonprofit Consumers for Affordable Health Care is supporting the proposal as advocates point to skyrocketing health care costs.<\/p>\n \u201cMore than 4 out of 10, almost half of Maine families, are struggling with medical debt,\u201d said Executive Director Ann Woloson. These families owe about $4,500 on average, according to survey results released Thursday by Woloson\u2019s organization.<\/p>\n \u201cHospitals continue to raise their prices every year,\u201d said Rep. Drew Gattine, D-Westbrook, the bill\u2019s sponsor. \u201cAnd that translates directly into higher insurance rates for working people and then also higher out-of-pocket costs for working people and a very large cost for businesses.\u201d<\/p>\n Hudson said he understands where the bill\u2019s proponents are coming from, but at the same time, \u201cMaine is a very fragile ecosystem of care,\u201d he said.<\/p>\n The bill proposes capping hospital prices at 200% of what Medicare reimburses for a service.<\/p>\n This would effectively cut reimbursement rates for privately insured patients by about 30%, according to Maine Hospital Association President Jeffrey Austin. Across all hospitals, that will result in a one billion dollar loss, he added.<\/p>\n Hospitals need to charge privately insured patients to offset losses associated with government payers, according to Hudson. <\/p>\n \u201cThe cost of care is more than what Medicare and Medicaid reimburse,\u201d he said. Medicare reimbursements cover 83 cents per dollar spent in hospitals, according to the American Hospital Association<\/a>.<\/p>\n Northern Light is reimbursed by government payers at 80% of the actual cost of care, according to James Rohrbaugh, the health care system\u2019s executive vice president and chief financial officer.<\/p>\n Hudson and Austin both warned that reducing hospital revenue could lead to closures, service cuts and job losses. Hudson couldn\u2019t provide an estimate of how many jobs Northern Light would have to cut.<\/p>\n Northern Light already closed its Waterville hospital<\/a>\u00a0and walk-in clinic<\/a>\u00a0last year, decisions that the hospital system said helped reduce<\/a>\u00a0its debt.<\/p>\n In the face of price capping, hospitals would have to cut services that don\u2019t make a profit, Austin said, which tend to be outpatient services like pediatrics, substance use and mental health. These services also tend to be disproportionately utilized by Medicare and Medicaid patients, he added.<\/p>\n A spokesperson for Covenant Health, which runs St. Joseph Hospital in Bangor, deferred comment to Austin.<\/p>\n Supporters of capping hospital prices also point to other states that have implemented similar measures, such as Oregon<\/a>\u00a0and Rhode Island<\/a>, where a group of Brown University researchers have found that caps reduced costs without a major impact on finances or quality of care.<\/p>\n \u201cIf the goal is to lower insurance premiums and make health care more affordable, I think this is the lowest hanging fruit and the policy that across everything else has been the one that\u2019s been proven to be the most successful,\u201d said Christopher Whaley, a health policy professor at Brown.<\/p>\n \u201cEvery market is unique. I think the general principles still hold though,\u201d he said of Maine\u2019s proposal.<\/p>\n But critics say it\u2019s impossible to draw a fair comparison between Maine and these other states.<\/p>\n \u201cIt\u2019s an apples and oranges comparison,\u201d Hudson said. \u201cHospitals that are running a positive operating margin or have a higher cash flow, they can absorb this with minimal change. This is not Maine. Maine can\u2019t support that.\u201d<\/p>\n Hospital leaders say they\u2019re already bracing for losses because of the federal budget reconciliation bill, which will cut about $5 billion<\/a>\u00a0from MaineCare.<\/p>\n Northern Light is expecting a $27.3 million loss because of these cuts, Hudson said. About 65% of Northern Light\u2019s revenue<\/a>\u00a0comes from MaineCare, Medicare and Medicaid.<\/p>\n He expects that the price-capping bill would result in a $220 million loss for Northern Light.<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/02\/128th_legislature-15-600x400.jpg\")
Rep. Drew Gattine, D-Westbrook, is pictured at the Maine State House on Aug. 30, 2018. Credit: Troy R. Bennett \/ BDN<\/p>\n