COLUMBIA — Gov. Nikki Haley and her administration have emphatically said “no” to expanding Medicaid in South Carolina, but whether the state agrees to the federal plan to expand coverage to more low-income adults is ultimately not up to her.
That decision rests with the Legislature.
While the Republican leaders of the House and Senate generally oppose the idea, it’s not guaranteed that lawmakers will reject the expansion – especially considering the contentious relationship between the Republican governor and the chambers’ GOP majorities.
Both House Speaker Bobby Harrell and Senate President Pro Tem John Courson said they haven’t yet discussed the issue with their members, noting the U.S. Supreme Court’s decision came down as the legislative session ended. But it’s expected to be hotly debated during the budget process next year. The expansion plans of the federal law derided by Republicans as “Obamacare” are due to start in 2014.
The nation’s high court upheld the law but ruled the federal government can’t penalize states for opting out of the Medicaid expansion, making it a choice instead of a mandate.
Courson, R-Columbia, said he’s concerned about the growth rate of the current Medicaid system. The cost to the state has nearly doubled in the past decade – to $878 million last year – so he’s very leery about expanding eligibility.
In South Carolina, parents qualify for the government insurance program for the poor and disabled if their take-home pay is up to 50 percent of federal poverty guidelines.
That’s less than $7,400 this year for a single parent with one child, or $9,300 for a family of three. However, waivers allow deductions for child care expenses, child support payments and working income, allowing a family of three to make more than $16,000 and still qualify. Actual income limits vary by each family’s circumstances.
The federal health law calls for expanding Medicaid to all adults whose yearly income is 130 percent of poverty guidelines, including those without children, who are currently ineligible no matter what they make. That translates to income limits of roughly $15,400 for an individual and $30,650 for a family of four.
The federal government would pay the full cost of the expansion through 2016. After that, the states would pick up 5 percent of the cost through 2019, and 10 percent thereafter.
That may sound like a great deal, but it translates to billions of dollars, said Tony Keck, director of the state’s Medicaid agency, explaining his and Haley’s opposition.
“We don’t believe the best way to get people healthy is to add billions of dollars of more money to a program that is already eating up larger and larger portions of the state budget and not producing the results we want,” said Keck, director of the state Department of Health and Human Services.
He believes those who call it a no-brainer are “committing a very common and important error in cost-benefit analysis.”
“The only way that one-for-nine works is, you’ve got to have the dollar to spend, and what you’re spending that dollar on has to work,” Keck said.
According to the state’s actuaries, the expansion would cost the state between $1 billion and $2.4 billion extra through 2020. The next seven years with the full 10 percent match would be even more expensive. The first figure assumes 510,000 additional people enroll and rates paid to physicians don’t change. The top figure is based on all 736,000 eligible people enrolling, and rates having to increase so doctors take Medicaid patients.
Even without expanding eligibility, Keck said, the law is expected to add 170,000 already-eligible people to Medicaid rolls over the next two and a half years, as people learn of the option, enroll to avoid fines, lose insurance through their jobs or can no longer afford it. Their coverage will be paid according to the regular match rate of 30 percent.
That could require an additional $150 million for the 2013-14 fiscal year, said Keck, who is working on his budget request for the year.
“Even if we did nothing, we could take every new general fund dollar projected to come into the state,” he said.