updated March 20
The Senate defeated on Wednesday a measure to slow the implementation of the federal Affordable Care Act in South Carolina. An amendment to a bill invalidating the ACA, the measure would have replaced the nullification language with language indicating the state couldn’t stop the federal law, but that it wouldn’t use its resources to implement the ACA.
The amendment by Sen. Tom Davis, R-Beaufort, failed after Lt. Gov. Glenn McConnell ruled parts of the amendment were not relevant to the bill. Senators then voted down the bill 33-9.
Central to the debate was the state’s refusal to expand Medicaid up to 138 percent of the federal poverty level—$31,809 for a family of four. Gov. Nikki Haley’s administration has already rejected the expansion, which would have covered approximately 200,000 South Carolinians still lacking coverage. Medicaid could be expanded through the budgeting process. The House didn’t fund expansion in its budget. The Senate’s budget isn’t finalized, but Davis doesn’t think there would be enough votes to override the governor’s veto on Medicaid expansion, he said in a phone interview.
His legislation sided with Haley on the expansion of Medicaid, a program that already had 1,044,000 enrolled by the end of February. The roll is expected to grow by 51,000 by the end of the fiscal year in June–at least 12,000 of those are expected to enroll in the next couple of weeks. And the state Department of Health and Human Services anticipates 1.158 million will be enrolled by the end of 2015.
Those supporting the Medicaid expansion to include even more people champion the low price tag—free to states for the first three years, though states expanding their rolls would have to contribute to get the federal funds after that point. “It’s the ‘who knows’ that has me concerned,” Davis said on the Senate floor in early March.
Tony Keck knows. As director of DHHS, Keck is tasked with overseeing a more than $6 billion Medicaid budget.
Free Medicaid expansion isn’t free
In a phone interview Keck compared the federal government picking up the tab for Medicaid for the first three years to a teaser rate on a credit card. If South Carolina expanded the program, it would cost between $600 million and $1.9 billion by 2020. That projected range is based on a would-be increase in enrollment eligibility from 69 percent to 100 percent, though Keck said it’s unlikely that 100 percent of those eligible would enroll. For the seven years after 2020, the program would become almost twice as expensive.
And how do you solve one of the most expensive health care systems in the world by spending more, Keck asked rhetorically. You don’t. The ACA doesn’t solve those projections, he said, we will still spend more on health care. In fact, he said, South Carolina had the ability to expand the program before this debate. Why didn’t the state try expanding Medicaid before now, he wondered. “It’s just one of those things I sit around and ponder.”
Activists favoring Medicaid expansion tout a 2012 Moore School of Business study, which found state job growth and an increase in the general fund stemming from expanding the program. Keck finds the study problematic because the analysis overlooks a shortage of medical professionals. He also finds it flawed because it doesn’t consider alternative uses for the funds—like our roads that are in disrepair, for instance.
But for Keck, one of the primary flaws in the federal move to expand Medicaid is that it isn’t paid for. Some proponents advocate expansion so that residents can recoup some of their tax dollars.
Sen. Brad Hutto, D-Orangeburg, took that position Wednesday as the Senate debated the health care legislation. “[We should] accept our own tax dollars back into this state,” he said. He touted Arizona, Ohio and New Jersey—all states with Republican governors—as examples South Carolina should follow. Haley is also a Republican.
But according to Keck, it doesn’t work that way. Our income taxes haven’t been raised to cover the Affordable Care Act, he said. “The reality is that nobody is paying for it now.”
As for the argument that Medicaid expansion decreases the federal budget? According to the White House, health care reform is expected to knock $200 billion off the federal deficit over a decade. “It’s still borrowed money,” said Keck, “it’s just less borrowed money.”
Other figures show expanding Medicaid will cost us. Keck quoted estimated federal costs for expanding health care coverage ranging from $1 trillion to $1.5 trillion over the next decade, though he thinks costs will probably near the higher figure.
But for advocates of expansion, South Carolina can’t afford not to expand the program to help those in need. They say health care is a moral issue and a basic human right. Truthful Tuesday protesters gathered a third week in a row on Tuesday to block the entrance to the Statehouse garage. The protests have led to 39 arrests, according to members of the social justice group, which has called repeatedly on politicians to expand Medicaid.
It’s funny when people say South Carolina is hostile to Medicaid, said Keck. The goal of the state and the department is to meet its existing commitment to the program. He cautioned against California’s model for funding the expansion. That state raised taxes to pay for its current deficit and to pay for the expansion.
Using resources wisely
Instead, DHHS’ priority is on spending the money we already have to improve the system, no small task with more than 300,000 uninsured in the state. To help meet that demand the department funneled $45 million to its Healthy Outcomes program—aimed at treating the whole person, and specifically, the uninsured and heavy emergency room users. The program’s goal is to boost health and lower costs. “[Health care providers] feel like for the first time the shackles have been taken off,” said Keck.
To lower health care costs through prevention, the department is reaching out to the state’s neediest, some of whom Keck said are “sleeping under a bridge somewhere.” DHHS is reaching out to churches and other community groups to connect those in need with care to prevent obesity, diabetes and other chronic conditions. Dental care is another prevention area of focus. Keck told a Senate Finance subcommittee Wednesday that a focus on dental care would cut down on ER visits. This is because preventative and restorative dentistry would reduce the number of abscesses driving people with dental problems to the ER.
But a long-term transition to preventative care is a challenging proposition since hospitals currently have to pay for their expensive beds and equipment. “Heads in beds” is the only way hospitals can repay the debt for their supplies, said Keck. When asked if it’s fair to compare the country’s pricey health care system to a bubble, he liked that idea. “The price of the asset outpaced its value,” he said. He recalled the analogy about insuring a car against oil changes. “That doesn’t make a lot of sense.”
But Keck is optimistic. He said transparency is exposing that bubble. And with more transparency, he expects to see payers refuse to pay.