The U.S. Supreme Court’s decision Thursday to uphold the Affordable Care Act means health care continues with the status quo in South Carolina, with one huge decision looming on the horizon.
Most talk about the justices’ 5-4 decision revolves around the finding that a mandate to have health insurance can be viewed as a tax, but the court also clarified a provision on states’ rights to opt out of expansion of Medicaid rolls.
The health care reform act required states to comply with new eligibility requirements for Medicaid or risk losing their federal Medicaid funding. The court ruled that provision constitutional as long as states only would lose the new federal funds. If a state decides not to cover the additional people eligible to come on the federal Medicaid rolls, it would lose only the federal funding dealing with those new enrollees.
That’s important for South Carolina, which has in recent years shown a willingness to turn down federal funds with strings attached. It’s too early to say state leaders will do the same in this case, but Gov. Haley hinted at that direction in her response to the ruling.
“How we take care of South Carolinians ... is not the way they take care of Texans, it’s not the way they take care of Californians,” said Haley, a Republican who has spoken out in the past against President Obama’s health care reform provisions. “If D.C. would let us do our job, we would spend less money” on health care.
Tony Keck, director of the state Department of Health and Human Services, which handles Medicaid cases, said the state will fight against the inflexibility of Medicaid provision, but he said the decision on whether to opt out of the Affordable Care Act expansions requires more study.
“We’re sitting in the same chaotic mess we were in before,” Haley said.
On the other side of the debate, Rep. Bakari Sellers, D-Bamberg, said what Haley wants would exacerbate health care disparities and her attacks on the ruling are political talking points that Republicans are going to use in the fall presidential campaign.
Health care leaders expect the decision to have little short-term impact, but their reactions to the ruling were a mixed bag.
“All of the conditions that gave rise to the Affordable Care Act continue to exist,” said Joseph G. Pidmont, present of Carolinas HealthCare System. “Today’s ruling changes nothing in the immediate term, and the long-term is yet to be determined. Our goal has been to create our own future, rather than simply wait for the future to be imposed on us. We have done this by concentrating on those aspects of the healthcare spectrum we can control.”
The physicians in the S.C. Medical Association were disappointed that the justices found constitutional most of the act, which “lacks key components for successful health care reform,” said Todd Atwater, chief executive officer of the SCMA. “... We have missed a critical opportunity to start afresh with a more sustainable law. The SCMA will continue to advocate for health reform that is both fiscally sound and, most importantly, places a priority on the physician-patient relationship.”
South Carolina’s Congressional delegation, who have spoken out on the act for the past two years, offered predictable responses.
“Today’s decision by the United States Supreme Court is extremely disappointing for limited government and expanded freedom,” said Rep. Joe Wilson. “We should have healthcare based on a doctor-patient relationship rather than a politician-patient mandate.”
Sen. Lindsey Graham focused on the court’s declaration that the mandate in the reform act, which Republicans often refer to as Obamacare, can be viewed as a tax.
“During the entire congressional debate over Obamacare, Democrats vehemently denied this was a tax on the American people,” Graham tweeted.
The S.C. Department of Health and Human Services estimates the reform act provisions – which increases the income levels for Medicaid eligibility – would add 500,000 new Medicaid patients in the state in 2014 and an addition 200,000 by 2024. HHS director Tony Keck has said those additions would overwhelm the agency, which now handles about 800,000 Medicaid patients.
The act requires the federal government to cover the cost of the Medicaid expansion completely in 2014, reducing slowly to 90 percent in 2020. So the fiscal impact on the states would be increased slowly.
The state spends an average of about $7,000 per year per Medicaid patient, according to a report by the state Legislative Audit Council. Medicaid pays about 57 percent of the cost to cover current Medicare patients. But if the federal government covers at least 90 percent of the cost of the new Medicaid patients, the cost to the state would be lower per person for the new Medicare enrollees.
Business advocates say the decision will hurt small businesses required to offer health insurance or face tax consequences.
“Under the health-care law, small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses,” said Ben Homeyer, director of the state office of the National Federation of Independent Business. “NFIB will continue to fight for the repeal of health-care in the halls of Congress. Only with a full repeal of the law will Congress have the ability to go back to the drawing board to craft real reform that makes reducing costs a number one priority.
“The power and control of health-care decisions should be in the hands of the consumer, not the government.”
On the other hand, some business see a market.
Healthcare Supply Chain Association President Curtis Rooney said the “the national conversation can return to healthcare reform centered on cost containment.” And group purchasing organizations backed by his association can “deliver the best, most innovative products at the best value, and deliver billions in savings every year for hospitals, Medicare and Medicaid and taxpayers.’
Who is covered now by Medicaid now:
• pregnant women and children younger than age 6 with family incomes at or below 133 percent of federal poverty level
• children ages 6-18 with family incomes at or below 100 percent of federal poverty level
• people who qualify for Supplemental Security Income benefits based on low income and disability status
Who would be added under ACA expansion provisions starting in 2014:
• nearly all people younger than 65 with household incomes at or below 133 percent of federal poverty level