Augusta - The Obama administration has rejected Governor LePage's plan to cut health care coverage for more than 20,000 low-income Mainers, but granted changes that will reduce or eliminate coverage for thousands.

The administration denied Maine's request to eliminate Medicaid coverage for Maine parents who make between 100 percent to 133 percent of the federal poverty level and to drop coverage for 19- and 20-year-olds.

But it did grant permission to reduce coverage under the Medicare Savings Program and eliminate coverage for parents making between 133 percent and 200 percent of the poverty level. That'll mean a loss of Medicaid coverage for about 12,600 people and savings program benefits for 2,600. Another 8,000 would see savings program reductions.

The scaled-back reductions would save $4 million of the $20 million originally projected.

Reaction from the state house was divided after news of the federal government's decision came out. "The Democrats never supported these cuts, because we knew they were illegal and morally irresponsible," said Lewiston Democrat Peggy Rotundo.

Republican Kathy Chase of Wells said she was disappointed with the ruling. "I don't think the federal government is going to be able to afford us too much longer, anyway. We ought to be paying attention, and they ought to be paying attention, to what were asking for: a reduction from them," Chase said.

The decision will make the task even more daunting for members of the Appropriations Committee, who are already wrestling with a $35 million curtailment order from Governor LePage. "The last legislature and the governor did take savings on these cuts and it was a big gamble that they made, because they knew they needed approval from CMS. There will be a big impact on the budget, but that was an impact they could have foreseen," said Sara Gagne-Holmes, of the Maine Equal Justice Partners.

Rotundo, the House Chair on the Appropriations Committee, was one of the Democrats who did foresee this ruling. When these cuts were first proposed, Rotundo and other Democrats said from the start they would never pass federal scrutiny. "We've anticipated that we would need to find that funding. The Democrats did not from the very beginning support these cuts, because we knew they were fiscally irresponsible and illegal," Rotundo said Tuesday.

Now Republicans and Democrats will have some tough choices to make as they work to once again balance a budget. "Obviously we're already looking at quite a deficit at the point," Chase said." "We really need to address that. This just puts one more burden on the whole pile of debt that we have that we've got to take care of. I think realistically our job is still going to be as difficult. It's just going to be a little bit longer before we can all come to an agreement."

(The Associated Press contributed to this story.)

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