The debate over whether South Carolina should accept Medicaid expansion heated up Tuesday with a spirited give-and-take between advocates of expansion and the state’s most outspoken opponent.
Tony Keck, director of the S.C. Department of Health and Human Services, which handles Medicaid in the state, took the stage at the USC Law School auditorium in a panel discussion with three advocates for expansion. Keck’s most strident points were met with guffaws from the pro-expansion audience, while the other speakers occasionally drew applause.
In the end, Keck called for patience, while the others seemed to be running out of it.
“Why don’t we wait and see for the next three years how this all plays out,” Keck said. “This is the biggest change in 50 years to the biggest industry in the United States.”
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If the state waits, “hundreds of thousands of people will be right where they are right now, without access to health care,” said state Rep. Joe Neal, D-Richland.
When the U.S. Supreme Court ruled on the constitutionality of the Affordable Care Act in June, it allowed states to opt out of one provision — the expansion of Medicaid to cover all people ages 18-64 who make up to 138 percent of the federal poverty level, or about $15,000 annually.
About 329,000 people in that income range in the state don’t have health insurance, according to census records. But the actual number covered by the expansion would be higher because low-income workers with substandard private health insurance likely would switch to Medicaid.
The federal government plans to pay 100 percent of the states’ costs for expansion in 2014-2016. The states will begin paying a portion of the costs in 2017, rising to 10 percent in 2020. A study by USC’s Moore School of Business for the S.C. Hospital Association estimated accepting expansion would pump $11.2 billion federal dollars into the state’s economy and create 44,000 jobs.
But Gov. Nikki Haley and Keck, her appointed Cabinet agency director, argue that the state would be better off turning down the federal money. They see Medicaid as a broken program that stifles innovation, discourages personal responsibility and encourages fraud.
Tuesday night, Keck also pointed out that the health conditions of people currently covered by Medicaid in the state vary widely by geography. People in urban areas with Medicaid are much healthier than those in rural areas along the I-95 corridor. That indicates that the problem isn’t lack of health insurance but other underlying issues such as lack of education, lack of jobs and unstable family units. Keck contends the state would be better off spending its money to fix those issues.
“Health care spending is growing at such a rate that it’s crowding out spending on other issues,” Keck said.
Robert Greenwald, director of the Harvard Center for Health Law and Policy Innovation, took the opposite approach. “Those social determinants do matter a lot,” he said. “And access to health care is a leading determinant” in improving health.
The hospital association is a leading advocate for Medicaid expansion. The Affordable Care Act was designed to pay for expansion by cutting back on payments to hospitals for treating uninsured patients. If South Carolina turns down expansion, it will cost the state’s hospitals $2.7 billion in the next seven years, said Rozalynn Goodwin, a lobbyist for the association.
“That cannot and will not be absorbed without some kind of negative impact” on hospital services and employment, Goodwin said.
State legislators will make the expansion decision during their budget-writing process early in the 2013 session. They essentially could opt out of expansion by refusing to pay for the administration of the program. The state’s estimated cost for running the program is $27.6 million in the first year.
Considering Haley’s stance, expansion likely will need enough votes to override a veto.
“Expanding Medicaid will provide coverage for hard-working people who’ve paid taxes all their lives but are now struggling to make ends meet,” said Teresa Arnold, legislative director for AARP South Carolina, one of dozens of groups in the Accept ME SC coalition.
“If South Carolina fails to exercise the Medicaid expansion option as it currently exists, thousands of residents will not have access to affordable coverage and the state will, in fact, be creating a coverage gap for those who can least afford to go without health care.”