Editor's note: The following editorial appeared Tuesday in The (Rock Hill) Herald.
State lawmakers have pledged to find a way to pay an unanticipated $228 million cost overrun in the state's Medicaid program when they return to Columbia in January. But they need to do so without jeopardizing matching federal funds for Medicaid.
Lawmakers learned recently that the government-run health insurance program for the poor is projected to cost $228 million more than they had budgeted to spend on it this fiscal year. The first step in addressing the problem is to allow the state Medicaid agency to run a deficit when its funding runs out early next year.
The state was forced to take similar steps with the state prison system, allowing it to operate in the red. In both cases, of course, the legislature needs to find ways to pay the deficit and meet the constitutional mandate to balance the state's budget.
That is likely to become even more difficult in July, when the $1 billion in federal stimulus cash that is helping keep this year's $5 billion spending afloat runs out. But cutbacks now in Medicaid spending would be the worst option - both in terms of humane policy and sensible economics.
An economic recession is no time to deny medical care to the poor, who are hit hardest and who have nowhere else to turn when the economy goes south. But cutting services also makes no economic sense.
Unless the state allows Medicaid officials to run a deficit, the federal government could reduce its funding both this year and in the future. And that would be disastrous for the state.
This year, the federal government will pay $4.1 billion of the $5 billion in overall Medicaid expenses amassed by the state. The money goes to doctors, hospitals, nursing homes and pharmacies that care for the poor. If the state stops paying those expenses, health care providers would be laid off, adding to already high unemployment rolls.
The state Health and Human Services Department has a plan to reduce rates paid to health care providers who treat Medicaid patients. It also could reduce costs by requiring pre-authorization for some drugs. Those measures must be approved by the legislature.
But even with those savings, lawmakers will be hard-pressed to find a way to balance the budget. There is some good news: Tax revenue is up slightly more than projected, and the state also is expecting to collect $136 million more in cigarette taxes.
But there is no way to avoid painful decisions starting in January. For now, the only sensible recourse is to choose the least harmful option available.