Health coverage for an estimated half-million of the poorest South Carolinians remains in limbo because Gov. Nikki Haley's administration has said the state will "opt out" of a provision of the health-care law that would bring more people into the Medicaid program.
In one of Thursday's unexpected findings, the U.S. Supreme Court ruled that "states may now choose to reject the expansion of Medicaid," the state- and federally-funded health insurance program for the poor and disabled.
In his majority opinion, Chief Justice John Roberts said the federal government cannot "penalize states that choose not to participate in that new program by taking away their existing Medicaid funding."
The law originally threatened to take away existing federal Medicaid funds to states that declined to participate in the expansion.
That would have made it nearly impossible for states to decline, because they rely heavily on substantial federal matches to state Medicaid contributions. (South Carolina receives a 3-to-1 federal match)
Through her spokesman, Haley said South Carolina would not participate in the expansion. The state was one of 26 to file suit against the federal government to challenge the health care overhaul.
"We're not going to shove more South Carolinians into a broken system that further ties our hands when we know the best way to find South Carolina solutions for South Carolina health problems is through the flexibility that block grants provide," Haley spokesman Rob Godfrey said in a statement.
S.C. Medicaid Director Tony Keck said the administration wants "more people covered, but we want it paid for under a model that works, not the status quo."
Critics, including Sue Berkowitz of the S.C. Appleseed Legal Justice Center in Columbia, attacked what they called political posturing of the Haley administration.
"It's reactionary," Berkowitz said of the opt-out decision. "This comes without thinking of residents' needs or a cost-benefit analysis. It's a political decision. What a shame."
State Sen. Brad Hutto called the decision "short-sighted," saying the people who remain uninsured will continue to use emergency rooms and other safety nets at the expense of others in the health-care system.
"This is money coming into the health-care industry," the Orangeburg Democrat said of the federal money that would have flowed to South Carolina under the expansion.
Mark Tompkins, a University of South Carolina political science professor who has studied the health-care overhaul, pointed out that South Carolinians contribute federal taxes regardless of whether the state uses those funds in the expansion.
The federal government would fund the expansion fully from its planned start in 2014 through 2016. States' contributions gradually would increase to a 10 percent maximum in 2020.
The expansion would have extended Medicaid coverage to South Carolinians under age 65 with income below 133 percent of the federal poverty level, or about $31,000 for a family of four.
Most of those residents - estimates range from 350,000 to more than 600,000 - now likely would remain without coverage. The law did not make them eligible for subsidies available to others for buying insurance on so-called "exchanges" - or websites for comparison shopping - because those residents were thought to be covered by Medicaid.
"Nothing is going to happen to them until 2014," Keck said. "We have time to talk about it."
He said it was "still hard to tell" what the specifics of the law's implementation would be, saying the S.C. Legislature would have a role in decision-making.
The court apparently expected some states to go down the same route South Carolina has chosen.
"Some states may indeed decline to participate, either because they are unsure they will be able to afford their share of the new funding obligations, or because they are unwilling to commit the administrative resources necessary to support the expansion," Roberts wrote.