COLUMBIA — The director of South Carolina’s Medicaid agency said Monday he realizes his preliminary budget calling for nearly $200 million more from state taxes in 2013-14 is likely an impossible request.
The increase would eat up all of the state’s growth for the next fiscal year, according to long-term predictions issued last spring.
“We’ve already eaten up every single state dollar. Clearly, that’s not going to fly,” Department of Health and Human Services director Tony Keck told The Associated Press.
But Keck said he needed to be forthright with lawmakers in his report jump-starting the budget process, which he’ll discuss Wednesday during his quarterly update to a Senate panel. Gov. Nikki Haley will use it and other agencies’ submissions to create her executive budget proposal, which Keck says will represent his official request. Her office did not immediately comment on his report.
The additional $193.5 million detailed in Keck’s report for Medicaid is due to the federal health care overhaul, general inflation and the loss of tobacco taxes. The money would represent an 18 percent increase over the state’s current match for the joint state-federal program.
The legislature must decide next year whether to expand Medicaid coverage in 2014 to embrace more low-income adults, as called for in the federal healthcare overhaul. The U.S. Supreme Court upheld the law in June but ruled the federal government can’t penalize states for opting out, making the expansion a choice instead of a mandate.
Keck’s budget submission doesn’t include expanding eligibility for the government program for the poor and disabled.
His agency expects the law to add roughly 205,000 already-eligible people to Medicaid rolls over the next two years, as people learn of the option, enroll to avoid fines, lose insurance through their jobs or are unable to afford premium hikes. That also includes 65,000 children in the state’s poorest households who are being automatically enrolled by the agency this month, as approved in the current budget.
The 130,000 already-eligible residents expected to sign up between July 2013 and June 2014 account for $70 million, or more than a third, of the agency’s preliminary request.
The agency must make up $60 million in lost tobacco revenue. For the first year following the state’s 50-cents-per-pack cigarette tax increase, all excess was side aside. But that pot of money is wiped out after two years of using the reserves to bridge Medicaid deficits.
“We knew we’d be in this spot, but we thought it was the responsible thing to do to get us out of the deficit without causing too much pain,” Keck said.
The agency also expects the state’s Medicaid rolls to grow by 2.8 percent, to 1.1 million children and adults by summer 2014. That normal growth of newly eligible – outside of the federal health law – along with inflation in health care costs is projected to increases costs by $64 million, according to Keck’s report, submitted Sept. 27.