South Carolina Gov. Nikki Haley (R) and the state’s Republican-led legislature have so far resisted one of the primary goals of Obamacare: expanding Medicaid.
But that has not deterred the state’s Democrat lawmakers, who say Medicaid expansion is a top priority.
Under Obamacare, states have the option of expanding Medicaid eligibility to those with incomes of up to 138 percent of the poverty line, or $23,344 for a family of three. For the first three years of the expansion, beginning in 2014, the national government has promised to cover 100 percent of the cost for expanding to the new populations. The national share falls to 90 percent by 2020, when states will have to pick up 10 percent of the costs of expanding the program.
Expansion Already a Burden
States that have already expanded Medicaid are facing unexpectedly high enrollments and huge cost overruns.
In Illinois, 634,000 people signed up under the state’s Medicaid expansion, more than three times the 199,000 new enrollees predicted by former Gov. Pat Quinn (D) and his aides.
New Mexico must find an additional $1.1 billion per year to cover its base Medicaid program and the state’s expansion by 2020, when almost half the state’s residents will be enrolled.
In Ohio, the state’s Medicaid expansion ran $63.7 million over budget from July 2014 to September 2014. Expansion in Ohio cost more than $250 million in September 2014 alone and has set federal taxpayers back $1.7 billion since January 2014.
South Carolina Should Not Succumb
South Carolina should continue to refuse expansion, thereby avoiding the mistakes other states have made, says Oran P. Smith, a senior fellow at the Palmetto Promise Institute.
“Already, some of the states that have expanded are sitting there overwhelmed to the point that even the more mainstream media … are reporting that it’s going to be unsustainable for these states that have chosen to expand, even with this massive ratio of state-federal dollars,” Smith said.
According to the South Carolina Policy Council, if all states expand Medicaid, spending on the program by the national government would increase by $952 billion through 2022. Total spending by the states would increase by $76 billion.
Medicaid spending in South Carolina alone would increase $1.5 billion through 2022, a 7 percent increase, according to the report.
No Money Left Behind
Smith says forgoing Medicaid expansion does not put South Carolina at a disadvantage compared to states that choose to expand.
“The notion that if South Carolina doesn’t take the money, it goes somewhere else, is not really true, because only the states that expand [Medicaid] get the money,” Smith said. “That’s probably the hardest myth that we’ve had to overcome, but one that we continue to be a truth squad for, and that is that it’s those that expand that become a part of the problem and drive up the deficit.” Smith says he would ultimately like to see less federal control over health care.
“What should be a long-term goal would be that South Carolina is able to take care of its own citizens in this area,” Smith said. “What’s needed in Medicaid is to allow the federal system to work and allow the states to have an opportunity to adjust for their populations and their specific needs in a way the Washington[, DC] straitjacket just doesn’t allow for.”
Fix What’s Broken
In addition to exploding enrollment numbers and massive cost overruns, research shows a long history of Medicaid enrollees having worse access and outcomes than privately insured individuals and the uninsured. This is due in part to the program’s low reimbursement rates, which have resulted in an estimated one-third of doctors now refusing to accept new Medicaid patients.
Further problems include the waste, fraud, and abuse inherent in a government-run program. Medicare pays more than one billion claims annually, and in 2014 the Government Accountability Office reported Medicare’s “improper” payments—incorrect or erroneous payments—amounted to $60 billion.
Former U.S. Attorney General Eric Holder said in 2012 Medicare fraud was between $60 billion and $90 billion annually.
No Plans to Expand
Medicaid will never be an ideal health care program, nor will the South Carolina General Assembly formally expand it under Obamacare, says Jamie Murguia, director of research at the South Carolina Policy Council.
“We oppose expanding Medicaid precisely because we think low-income people should have access to quality care,” Murguia said. “The way to do it is not to dump the poor into a terrible government program, but to make quality care less expensive. To do that, the health system needs reforms which cut back on regulations and coverage mandates.
“Any formal expansion is highly unlikely to pass, but that hasn’t stopped the legislature from toying with the program,” Murguia said.
Ann N. Purvis ([email protected]) writes from Dallas, Texas.
Seanna Adcox, “Democrats to renew push for Medicaid expansion in SC,” Associated Press, July 25, 2015: http://www.greenvilleonline.com/story/news/2015/07/25/democrats-renew-push-medicaid-expansion-sc/30662713/
Kendall Antekeier, “Research & Commentary: South Carolina Medicaid Expansion,” The Heartland Institute, November 12, 2012: https://heartland.org/policy-documents/research-commentary-south-carolina-medicaid-expansion
Kendall Antekeier, “Research & Commentary: States Should Avoid Medicaid Expansion,” July 3, 2012: https://heartland.org/policy-documents/research-commentary-states-should-avoid-medicaid-expansion