Highlight on South Carolina: Medicaid Grows Despite Rejection of Expansion and Debate Continues

South Carolina lawmakers chose to opt out of participation in the Patient Protection and Affordable Care Act’s (ACA’s) (P.L. 111-148) Medicaid expansion initiative because of “the program’s high costs and inefficiency,” according to a Kaiser Health News (KHN) release. Even though South Carolina has rejected Medicaid expansion, Medicaid is growing in the state. State officials predict that by June 30, 2014, about 130,000 people will enroll and that number will grow to 162,000 or 16 percent by June 30,2015. Those numbers reflect a triple increase in enrollment in the state in a typical year and are higher than the 12 percent average increase expected in states that are expanding eligibility, KHN reported. “If the state had expanded Medicaid under the health law, it would have extended coverage to another 340,000 people,” KHN said.

South Carolina ‘s Position on ACA

In addition to state lawmakers, South Carolina Governor Nikki Haley and Tony Keck, Medicaid Director of the South Carolina Department of Health and Human Services (SCDHHS) oppose Medicaid expansion. Under sec. 2001(a)(1) of the ACA, eligibility for Medicaid must be expanded to nonelderly individuals with incomes at or below 133 percent of the federal poverty level (FPL) beginning  January 1, 2014. The federal government will pay 100 percent of the costs to expand Medicaid for those states that choose to participate beginning January 1, 2014, through December 31, 2016, and gradually decrease the payment to 90 percent of the costs. Beginning in 2020, states that are participating in the expansion program would have to pay 10 percent of the costs of the expansion. “By refusing to participate, South Carolina is turning down approximately $4.1 billion from the federal government that would have covered the expansion costs through 2017,” the Post and Courier reported.

In addition to rejecting Medicaid expansion, state lawmakers have proposed a measure that would ban state agencies from helping to carry out health care reform. The bill proposes to nullify and void “unconstitutional laws enacted by Congress” that take advantage of the health insurance industry and mandate individuals to purchase health insurance under threat of penalty, it prohibits individuals from enforcing or attempting to enforce such unconstitutional laws, and establishes criminal penalties and civil liability for violating the law (see H 3101).”  Under the bill’s provisions, agencies, officers, and employees of the state would be prohibited from implementing any provision of the ACA, state exchanges would be outlawed, tax deductions would be issued to individuals equal to the tax penalties levied by the federal government, and the state attorney general would be directed to sue over enforcement of the law. The bill will be debated in the state Senate this month along with an amendment by Tom Davis (R-Beaufort).

Medicaid Expansion Supporters

South Carolina’s hospitals strongly support expanding the state’s Medicaid program, according to the South Carolina Hospital Association (SCHA). SCHA stated that “the evidence is overwhelming that expanding Medicaid will be good for people and good for business in South Carolina. … [I]f South Carola doesn’t expand Medicaid, our state will leave hundreds of thousands below 100% of poverty  with no assistance.” SCHA reported that the ACA will make health insurance more affordable by offering premium subsidies to persons earning up to 400 percent of the poverty level, roughly $45,000 for an individual or $92,000 for a family of four.

On March 18, 2014, the Post and Courier reported that 16 of nearly two dozen protesters entreating South Carolina lawmakers to accept federal money and expand Medicaid were ticketed for obstructing traffic outside the Statehouse in Columbia. The gathering of protesters, referred to as the Truthful Tuesday coalition, was organized by the South Carolina Progressive Network. The New York Times reported that a total of 39 arrests were made over the last three Tuesdays in South Carolina. The protests in South Carolina are among mounting movements in Georgia and North Carolina and new groups forming in Florida, Alabama, Wisconsin and New York.

Medicaid Enrollment

Currently, South Carolina provides coverage to more than one million residents under the state Medicaid plan, which is funded by state and federal money (about 70 percent), according to the Post and Courier.  In a 2012 report, the Center on Budget and Policy Priorities (CHPP) found that 389,000 uninsured adults would have been eligible for Medicaid if South Carolina had chosen to expand Medicaid, 297,000 would be newly eligible under the expansion, and 92,000 were eligible under the current rules but were not enrolled. If South Carolina chose to expand Medicaid, an additional 312,00 adults who would be newly eligible for the program would enroll, the CHPP projected.

In an August 15, 2013, report, John Supra of the SCDHHS said that “Medicaid expansion is borrowed money.”  Describing enrollment of individuals eligible for Medicaid, Supra explained that “Without Medicaid Expansion: 101,000 may drop private insurance” and “162,000 currently eligible […] may enroll in Medicaid (Welcome Mat Effect).” “With Medicaid Expansion: 193,000 could drop private insurance to go on Medicaid” and “344,000 people will become newly eligible for Medicaid.” He noted that even without Medicaid expansion, South Carolina’s uninsured is reduced by 71 percent.

According to KHN, the state recently revamped its enrollment process for its Medicaid program and is actively trying to enroll more of those eligible for the program. The changes include an online enrollment system, increasing the number of  call center positions, using government databases of people who qualify for food stamps to identify those eligible for Medicaid, and working with an organization to train nonprofit groups in the state to sign up people. Even though the state has made strides to enroll more eligible individuals, it is likely that many of the new enrollees will be children and many poor adults will not be eligible, KHN noted. Under South Carolina’s Medicaid plan, adults without children, no matter what their income, are not eligible for Medicaid and neither are working parents making more than 88 percent of the federal poverty level (about $17,400 for a family of three) and nonworking parents with incomes over 50 percent of the federal poverty level (about $9,765 for a family of three).

WJBF news channel reported that SCDHHS estimated that “Medicaid growth in South Carolina will require the state to spend $467 million more” in the year ending in June 2015. Of that amount the state portion will be almost $150 million, while the federal government will cover the balance. Keck said that “the increase will bring the state’s Medicaid budget to almost $7 billion a year.” According to WJBF, Keck said that the growth is not from expanding the number of people who qualify for Medicaid, but from people who are qualified but not enrolled and added the growth is prompted by the health care reform law, including its requirement to have health insurance, and the state’s efforts to reach out to people who are qualified but are not enrolled.