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South Carolina: National health care may mightily expand state Medicaid, bills

March 29, 2010 — More than 40 percent of South Carolinians may be receiving health care through the state by the year 2020, thanks to President Barack Obama signing into law a national health care reform bill earlier this week, according to state officials and observers. The bigger shock may be in who will have to pay for it, not to mention how big the bill will end up being.
 
Currently, close to 20 percent of South Carolinians are covered under the state’s Medicaid program, according to Jeff Stensland, spokesman for the S.C. Department of Health and Human Services.

Stensland said even though the ink hasn’t completely dried on Obama’s health care bill, it could result in a “61 percent increase” in those covered by Medicaid in the state.
    
That could increase the percentage of state residents getting Medicaid to 32 percent, he said, as the new programs will bring more applicants than are currently enrolled.
    
The biggest area of change, he said, will be in the numbers of single, childless adults who will be covered by the federal program when the reforms are phased in in 2014.
    
"Nightmare" scenario ahead Stensland’s boss, DHHS executive director Emma Forkner, has already warned state government that her agency faced a “nightmare scenario” after the 2010-11 fiscal year when federal stimulus dollars dried up.
    Stensland said that to get those federal dollars in the first place, the agency had to increase its rolls of Medicaid-eligible citizens. Now, he said, the beleaguered agency faces increased enrollment with decreasing dollars in the face of a federal mandate.
    
“This hasn’t made our job easier,” said Stensland.
    
Currently, approximately 10 percent of the state’s population (430,000 people) are covered under the state employees’ health plan, according to Rob Tester, who is in charge of the plan, which covers state employees, some municipal workers, teachers and others.
    There is a big difference between Medicaid and the state health plan, in that, enrollees in the health plan support their health care via contributions and Medicaid is underwritten by tax dollars.
    
Combining the projected 32 percent Medicaid enrollment with the 10 percent covered by the state health plan, the projected number of citizens getting their health care in South Carolina could hit 42 percent within 10 years.

Who's going to pay? Csiszar asks “Who’s going to pay for all this?” asked Ernst Csiszar, a former national insurance bigwig and state insurance regulator who now teaches risk management at USC. “You’re looking at him every morning when you shave in the mirror.”
    
According to DHHS spokesman Stensland, Obama’s reform bill could require an additional $900-plus million in state dollars to be pumped into Medicaid by 2020.
    
House Ways and Means chair Dan Cooper (R-Piedmont) said he wasn’t sure where that money was going to come from. When asked if this meant a higher likelihood of raised taxes in the near future, Cooper said he didn’t know.
    
Stensland said the money demands won’t begin until 2014 at a relatively manageable $50 million, but would escalate quickly from there.
    
One of the potential funding sources could be an increase cigarette tax. This year, the House sent over a proposed General Fund budget that included a plan where the per-pack cigarette tax would be increased from a national low 7 cents per pack, to 37 cents per pack.
    
Csiszar said there are more concerns over what is currently known about the effects of the national health care bill.
    “This is a blatant unfunded mandate,” said Csiszar. “It’s déjà vu over and over and over again, where the feds pass a law, and good part, not all of it, passed onto the state to twist in the wind.”  Expansion is good for state, Knapp says 

S.C. Small Business Chamber president and founder Frank Knapp, however, sees the Medicaid expansion as a “good deal” for the state.
        
“My understanding is that the federal government will, eventually, cover 90 percent of the expansion,” said Knapp.
        
He added that all the expansion would result in money being “directly infused into our estate’s economy,” and the result would be more jobs, economic development and opportunities for low income people in the state.

Meanwhile, Csiszar said states, like South Carolina, are faced with a list of difficult, and potentially unfeasible, options. “Like raising taxes or cutting programs like education to pay for all this.”
    
Additionally, Csiszar said Obama’s bill may have made health care more available, but it may not have made it more affordable. For states, that is.

Crystal ball:  People see what they want to see in Obama’s bill and its ripple effect. Conservatives decry it as an expensive and un-American maneuver. Others just see the numbers that will now have health care -- a projected 32 million nationally. Regardless, the sight of the coming (tax) bill may make both sides blanch.