By Lindsay Street, Statehouse correspondent | While the Trump administration has given the green light for states to restrict Medicaid access by requiring recipients to work, there’s a catch that could derail the effort in South Carolina.
The four states that have gained approval for work requirements have expanded Medicaid programs. That puts South Carolina in a bind because it would have to offer Medicaid to cover more poor people if it wanted to further restrict who can become a beneficiary.
But Gov. Henry McMaster’s office has said he will not expand coverage even if it means achieving his administration’s goal of requiring able-bodied adults to work to receive benefits:
“Under no circumstances will Governor McMaster approve of expanding Medicaid in South Carolina, but he does plan to continue pursuing the waiver that would require able bodied adults to work or give back to the community in some way in order to receive Medicaid benefits,” McMaster spokesman Brian Symmes said in a statement to Statehouse Report this week.
McMaster tasked S.C. Department of Health and Human Services in January to obtain federal authority to exclude jobless adults from Medicaid coverage. A draft of the plan was completed in early April and it seeks to require working-age beneficiaries, who are not pregnant or disabled to work, go to school or volunteer to receive benefits. If approved, the state agency wants to enact it beginning Jan. 1, 2020.
Beginning last year, the Trump administration started allowing states to seek waivers and implement plans that would make employment be a requirement for Medicaid eligibility. The Centers on Medicare & Medicaid Services (CMS) trumpets the work requirement as “community engagement” and a way to increase health of a community through incentivizing gainful employment or volunteering. Kentucky, Arkansas, Indiana and New Hampshire have received approval so far. CMS is part of the U.S. Department of Health and Human Services.
Those paying close attention to CMS’s communications say the agency is only approving waivers in states where there are no health coverage gaps between Medicaid and federally-subsidized insurance. All four states with approved waivers have expanded Medicaid under the Affordable Care Act.
The former head of the state’s Medicaid agency, Christian Soura, said CMS has “strongly signaled” publicly and behind closed doors in talks with state officials that those states gaining waivers to require work requirements for beneficiaries must have expanded Medicaid coverage or very few people found in coverage gaps.
“That’s the only version of the work requirement that they’re going to approve in this state,” said Soura, who now is vice president of policy and finance at the S.C. Hospital Association. “Non-expansion states will not get work requirement waivers approved”
Joshua Baker, the current head of S.C. Department of Health and Human Services (DHHS),told Statehouse Report this week that while the approving agency has only given waivers to expansion states, it has not explicitly said it would deny non-expansion states. Still, he said, it could be a factor in the decision for South Carolina.
“We’re making the reasonable assumption we are able to apply for this waiver under the current model,” Baker said Thursday. “Every state’s Medicaid program is unique.”
It’s not unheard of for a GOP-controlled state to later expand Medicaid coverage. This week, Virginia’s lawmakers approved expanding Medicaid there after a shift from Republicans to Democrats. There, four Republicans broke ranks to approve expansion. But it’s considered to be an unlikely move in deeply-red South Carolina with current leadership. This week, Democratic gubernatorial candidate James Smith released an ad this week pushing for expansion of Medicaid.
The coverage gap
South Carolina is one of 18 states that did not expand coverage through Obamacare. And it’s no secret that South Carolina has a chasm filled with those who make too much to receive Medicaid but not enough to be able to afford to purchase subsidized insurance on the marketplace.
Adults in the state who are able to qualify for Medicaid must earn below 67 percent of the federal poverty level. In 2017, the federal poverty level was $13,860 for a single person. That means a Medicaid beneficiary would need to earn less than $10,000 per year to qualify in South Carolina. If a person’s income exceeds 100 percent of poverty, then he or she is eligible for subsidized health insurance.
People who fall in the Medicaid eligibility gap earn between 67 percent and 100 percent of poverty, which represents about 6 percent of households in South Carolina. Meanwhile, DHHS estimates 180,000 South Carolinians who currently receive Medicaid in the gap through Obamacare could be impacted by the waiver’s implementation to end coverage to non-employed beneficiaries.
However, many Medicaid beneficiaries are already work, according to Palmetto Project Executive Director Steve Skardon.
“It’s kind of hard to imagine who these able-bodied people are who are receiving Medicaid and not working,” he said. He likened the not-working Medicaid-eligible person to those committing voter fraud, who “it turns out, they didn’t exist.”
Skardon had harsh words for any work requirement for Medicaid beneficiaries.
“This seems like an extremely expensive exercise that does not yield any practical results,” he said.
South Carolina’s proposal
South Carolina’s draft plan to add a work requirement for Medicaid, while bereft of specifics for implementation, spells out the state’s intentions should the plan be approved. The state wants to limit eligibility to individuals who are “employed, enrolled in a qualified education program, or who are participating in a qualified community engagement activity.” There would be exceptions for those who are pregnant or disabled.
The requirements would piggyback off of Temporary Assistance for Needy Families (TANF) and Supplemental Nutrition Assistance Program (SNAP) benefits, which already require community engagement for benefits. Already, according to the draft, more than half of Medicaid beneficiaries are enrolled in either program.
It’s that piggyback that would help with cost savings, according to Baker. The programs would have to merge into a single system, he said.
The cost
Meanwhile, a recent report from the Center for Budget and Public Policy, a national think tank, warns that states seeking waivers could face tens of millions in expenses in implementation and possibly hire additional staff with recurring expenses. The consolation, according to the report, is that states would save money by losing beneficiaries who no longer qualify for Medicaid.
Examples cited in the report include:
- Kentucky’s estimate of spending $186 million in fiscal year 2018 and an additional $187 million in 2019 to implement its approved waiver;
- Alaska’s projected cost of $78.8 million over six years, including about $14 million per year in annual ongoing costs; and,
- A Pennsylvania state official saying it would cost $600 million and require 300 additional staff to administer.
South Carolina officials have no such estimates, and Baker said he doubted the price tag would be so steep. He said Medicaid, SNAP and TANF need to modernize their systems anyway.
“We want to use this as an opportunity to modernize the systems in existence today,” Baker said. “That’s something the state needs to do whether we get this waiver or not.”
He also said no additional employees would need to be hired.
Others, like Soura, disagree that it will be cost-effective to implement the work requirement.
“The administration costs are undoubtedly in the millions; realistically, they are almost certainly in tens of millions,” Soura said. He broke down the total cost into a significant, one-time cost of the eligibility software system and the recurring expense of hiring “a whole bunch” of people to administer the program.
South Carolina’s current focus is obtaining a waiver from CMS that will allow it to end Medicaid dollars to abortion-providing clinics by requiring providers give “preconception care.” Baker said once that waiver is decided, it will shift focus on the work-requirement waiver. In the meantime, the state has begun talks with stakeholders and will continue drafting a plan for submission to CMS.
We Can Do Better, South Carolina!
Better yet spend those funds on child support enforcement, especially out of state, bring more money into our economy and making thousands of families ineligible for public assistance. I will be the first single mother in line to give up food stamps and medicaid.
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