COLUMBIA - Call it the Big Sell before the Big Fight. Republican Gov. Nikki Haley's administration, opposed to an expansion of the state's Medicaid program, has begun meeting with state lawmakers and other players in the debate over the expansion.
Making the case
S.C. Medicaid Director Tony Keck is making the Haley administration's case to reject the Medicaid expansion.The main points of Keck's argument include:Even without the expansion, the state's Medicaid budget will grow tremendously from inflation and new residents being added to the program under the terms of the Affordable Care Act. Of the $187 million in new general fund revenue the S.C. Board Economic Advisers is preliminary estimating for the fiscal year that starts July 1, the S.C. Department of Health and Human Services is estimating $160 million of it will be spent on Medicaid. If the state approves the expansion, there's only so much money in the budget and it could force the Legislature to make deep cuts to education spending down the line to keep up with Medicaid costs.Even without accepting the Medicaid expansion, the S.C. Department of Health and Human Services estimates the state's uninsured rate, 20 percent, will be cut in half in three years. The agency projects at least 440,000 South Carolinians will get new Medicaid or private coverage. A huge portion of current Medicaid spending is waste. The state can do a better job cutting down on waste by tailoring its own approach than implementing a federally-run expansion. The expansion would cause hospitals to lose focus on becoming more efficient and instead just expand.
The goal? Win allies now and when the Legislature returns in January, avoid a repeat of the last time the state had to decide whether to accept a huge sum of federal money.
In 2009, former GOP Gov. Mark Sanford unsuccessfully sought to reject $700 million in federal stimulus funding, making essentially the same argument Haley's administration is embracing now: that the cash will hurt the state in the long run.
The administration argues the state will not have the money to support the expansion, which would provide health insurance to an estimated 350,000 to more than 600,000 needy South Carolinians.
In addition, administration officials say the expansion won't help accomplish the goal of providing the most health care for the least cost. The Legislature ultimately will decide whether to move forward with the expansion or not, just as it did with the stimulus money.
The state took the stimulus cash after the Republican-controlled Legislature sought to overrule Sanford, who rejected lawmakers' mandate but was eventually sued and lost.
"In terms of the legality of it, we've seen how that plays out," said Tim Pearson, Haley's chief of staff. "The question is are the political realities different and where are the legislative leaders? I think that the framework is extremely similar. The question is whether or not it plays out the same way."
The federal pot is much bigger this time around. South Carolina stands to receive more than $13 billion with an estimated $1.1 billion match by the state for the first six years of the expansion. The federal government would fully fund the expansion, part of the Affordable Care Act, for the first three years from 2014 to 2016. States would contribute a maximum of 10 percent of the cost by 2020. Few states receive more assistance from the federal government on Medicaid payments as South Carolina, and nearly 20 percent of the state's residents lack health insurance.
The success that Haley's office, particularly her Medicaid Director Tony Keck, has in wooing GOP lawmakers and medical industry interests could go far in determining how the fight over the expansion plays out next year. The vast majority of Statehouse Democrats are widely expected to end up supporting the expansion.
The administration is sure to face fierce opposition. Several Democrats, advocates for the poor and groups such as the United Way Association of South Carolina say the state should follow through with the expansion. And frustration from expansion supporters is likely to build from a simmer to a boil in the more than three months before the Legislature can begin debate on the issue.
"This is not an academic exercise, this is real peoples' lives," said Sue Berkowitz, director of the Appleseed Legal Justice Center. "People who have been uninsured have been waiting decades."
In recent weeks, Keck has met with several lawmakers from both parties, including members of the House Ways and Means and Senate Finance committees. House Republican Caucus members discussed a presentation on the expansion created by Keck during a meeting in Charleston earlier this month.
Keck also has had frequent talks with the S.C. Hospital Association, whose members stand to gain tremendous economic benefit from an expansion of Medicaid.
The group did not respond to a request for comment, but Keck said the association supports taking all of the expansion cash.
Democrats who have met with Keck recently disagree with the Haley administration's assessment of the expansion. "It's time for the grandstanding to stop," said Rep. Gilda Cobb-Hunter, D-Orangeburg. She said the state will lose out on the economic benefits of the expansion, and will pay for it one way or the other through the state's matching portion or residents' tax dollars. House Minority Leader Harry Ott also supports the expansion after meeting with Keck.
The leading Republicans in the House and Senate, both of whom voted to accept the stimulus money three years ago, said they oppose the Medicaid expansion.
Senate President Pro Tem John Courson, R-Columbia, said he's very concerned about how the expansion could force cuts to education spending. In a statement, House Speaker Bobby Harrell of Charleston described the expansion as part of a tax increase associated with President Obama's health care law. He said it's up to states to be fiscally responsible by having the courage to say "no" to the law.
Still, there is skepticism that legislators ultimately will reject the expansion.
Sanford said the expansion of Medicaid is unsustainable and wished Haley "Godspeed" in her efforts to stop it.
But "At least in my experiences on this front, money wins out over the principle of limited government," he said. Scott Huffmon, a political scientist and pollster at Winthrop University, said lawmakers will be put in a tough spot. "The legislators are simply going to have a hard time saying we can't afford this dime on a dollar payout even if we don' have the money right now," he said.
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