By Barton Swaim | “As long as I am the governor of South Carolina,” Gov. Nikki Haley vowed in 2013, “we will not expand Medicaid on President Obama’s watch.” And again: “With your help,” she said in her 2014 State of the State address, “we emphatically said ‘No’ to the central component of ObamaCare, the expansion of a broken Medicaid program that is already cannibalizing our budget, and would completely destroy it in the years to come.”
Well, yes. Medicaid – a health care program in which states receive matching funds from the federal government – is cannibalizing the state budget and will destroy it soon enough. The governor is right about that.
But South Carolina hasn’t said “No,” emphatically or otherwise, to expanding Medicaid. As Statehouse Report detailed in an excellent report two weeks ago, and as the South Carolina Policy Council (for which I work) has been contending for more than two years, Medicaid expansion has happened, is happening and will keep happening.
State House Republicans like to take credit for stopping it, and State House Democrats like to blame Republicans for stopping it, but only the densest lawmakers aren’t aware that this is a preposterous charade: Medicaid spending grew by a billion dollars over the last three years, and the program took in about 300,000 more people during the same period.
The Department of Health and Human Services (SCDHHS), the state’s Medicaid agency, certainly hasn’t tried to hide the fact. In December of 2013, for example, the Post & Courier’s Lauren Sausser reported that Medicaid applications were up by more than 20 percent over prior monthly averages. The day that story ran, the agency’s Twitter account – @SCMedicaid – proudly announced: “SC residents eligible but unenrolled for Medicaid now signing up, leading to 20% increase in Oct.”
So what accounts for the difference between political bombast and numerical reality?
The answer has to do with what different people mean by “Medicaid expansion.” By a straightforward definition – increasing the amount of money spent on Medicaid, expanding eligibility requirements, enrolling more people – South Carolina is undeniably expanding Medicaid. Yet by the narrower criteria of the Affordable Care Act – that is, by criteria only health care policy wonks care about – we are not.
Under the Affordable Care Act (ACA or Obamacare), states were given the option of expanding Medicaid eligibility to people with incomes of up to 133 percent of the federal poverty line (i.e., 33 percent over the poverty line). That would include families of three making $23,344 per year. For the first three years starting in 2014, the federal government would cover 100 percent of the cost for states’ Medicaid expansion. Federal cost coverage would drop to 90 percent by 2020, leaving the state to cover 10 percent of the increase from that point onward.
The arguments against taking the deal are overwhelmingly compelling in my view, but leave those arguments aside. The point here is that, however it’s happening, more and more South Carolinians are being put on Medicaid, and SCDHHS is spending more and more state and federal dollars to make that happen.
And why are they doing it? In part, at least, because the Affordable Care Act made the job of running the state’s Medicaid program harder and more expensive. In his 2014 budget request for his department, Tony Keck, then the director of SCDHHS, argued that even if South Carolina didn’t participate in Obamacare’s expansion option, meeting the federal law’s new mandates would result in $321 million in new costs – and that was only in the first year.
The agency could meet those new costs in one of two ways: it could ask for and get more money from the General Assembly (not a reliable option), or it could shove more South Carolinians onto the Medicaid rolls – a surefire way of drawing down more federal match dollars.
That explains why it’s happening. But how is it happening?
As it turns out, there are several ways to get more people on Medicaid, and they don’t involve Obamacare’s expansion option. The Auto Enrollment program allows SCDHHS to enroll people automatically – typically children in families receiving food stamps but not already enrolled in Medicaid. The Presumptive Eligibility program, similarly, allows hospitals to “presume” certain patients are eligible for Medicaid, even if they’re not enrolled – thus enrolling them. And SCDHHS has altered its income eligibility formula in such a way that, when a recipient’s income rises above the eligibility level, he or she would continue to receive benefits. With reinvigorated emphasis on these and similar programs, SCDHHS could and did expand Medicaid.
Is it a good idea to enroll more low-income South Carolinians in a lackluster federal health care program? I think it’s a terrible idea.
It’s far worse, though, to do it and pretend we didn’t.
Barton Swaim is communications director for the South Carolina Policy Council and a frequent contributor to national publications.
We Can Do Better, South Carolina!