S.C. Medicaid coverage to expand; cost to soar by $914 million

03/25/2010 12:00 AM

03/24/2010 11:52 PM

New federal health care legislation will cost the state of South Carolina and its taxpayers $914 million.

That cost - the total of spending from July 1 to 2019 - will come as the state adds 480,000 low-income children and adults to a state health insurance program, as required by the new law, according to estimates by the state Department of Health and Human Services.

The expansion represents a 4.4 percent increase in the $20.9 billion the state would have spent on Medicaid during that nine-year period, adding roughly $100 million a year to the state's costs.

With the state already facing a likely $1 billion budget shortfall next year, Republican lawmakers - who control the General Assembly - said the additional health care costs are one more reason they oppose implementing the law, which President Barack Obama signed Monday.

At the federal level, U.S. Sen. Jim DeMint, R-Greenville, has introduced a bill to repeal the new law. However, that effort faces a stiff uphill fight. Democrats control the U.S. Senate, and even if that 59-41 advantage could be overcome, President Obama, a Democrat, would veto any repeal bill.

At the state level, S.C. Attorney General Henry McMaster, a Republican gubernatorial candidate, has joined a lawsuit challenging the law as unconstitutional because it requires U.S. citizens to buy health insurance.

Bills challenging parts of the law also are working through the S.C. Legislature.

A state Senate committee approved one of those bills Wednesday. If it passes the Senate and House and becomes law, that bill would require the state attorney general to challenge the constitutionality of any law that requires the purchase of health insurance. It also says S.C. residents can select an insurer of their choice.

"What it's against are certain mandates in the law that interfere with individual's freedom of choice," said state Sen. Mike Rose, R-Dorchester, who sponsored the bill.

Rose equated the new health care bill to the federal government's "cash-for-clunkers" rebate program, designed to encourage the purchase of fuel-efficient vehicles. Rose said his bill would prevent the government from requiring that consumers buy the health insurance equivalent of a Chevrolet if they prefer a Ford.

Rose's bill is modeled after similar laws that have been passed in Idaho and Virginia, and been introduced in more than 30 states.

"If (government) crosses this line," Rose said, "there's no limit to its intrusion."

However, state Rep. James Smith, D-Richland, said such efforts were not only likely to fail court challenges but also shortsighted.

"We need more health care, not less," Smith said, "This law provides concrete, real change in terms of access and affordability and, ultimately, will end up saving us money" by keeping residents healthier and out of more-expensive emergency rooms.

Smith, who runs his own law firm, said he has struggled to provide health insurance to all his employees. But tax credits in the federal bill, he said, make it more likely he would do so.

The largest expansion in the state's Medicaid coverage required by the new law is for adults without children. The state does not currently cover any childless adults. However, the federal law would add 200,000 such adults - members of the working poor - to the state's coverage by 2020, according to estimates by the state health agency.

The federal law also would add 142,000 children and 133,000 parents to the state's Medicaid coverage. They are from families with higher incomes, not previously covered by Medicaid.

(The bill extends Medicaid coverage to anyone earning up to 133 percent of the federal poverty level, or $14,300 for a childless adult and $29,300 for a family of four.)

Officials were not sure when coverage for the three new groups would phase in. But all would be covered by 2020.

Because of that uncertainty, House Ways and Means chairman Dan Cooper, R-Anderson, said he was unsure what impact the health care law would have on next year's state budget.

House Speaker Bobby Harrell, R-Charleston, said the health care law's additional costs through 2010 equal a fifth of the state's current yearly general fund budget.

State Rep. Eric Bedingfield, R-Greenville, has proposed a bill similar to Rose's.

"If enough states speak out on the issue, maybe we as a state can help drive the debate," Bedingfield said. "I don't think we can silently sit by."

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