A decision made more than three years ago by a committee that no longer exists might deal a major blow to Obamacare in South Carolina this summer.
That's when the U.S. Supreme Court will decide if customers who shop on HealthCare.gov can use federal financial aid to lower the amount they pay for insurance. Those customers include 37-year-old Erin Johnson and more than 140,000 other low- to middle-income South Carolinians who already receive those health insurance subsidies.
“If it's full price, I honestly don't think I could do it. I really don't make much,” said Johnson, a medical courier from Goose Creek. She receives a federal discount worth more than $100 and pays only $56 a month for her policy. Before she purchased the plan in October, she was uninsured. “I needed it. It was pretty awesome.”
Former members of the S.C. Health Exchange Planning Committee say they weren't aware in 2011 that their opposition to a state-based insurance marketplace might jeopardize so many people's ability to pay for coverage.
“At no point in the committee's discussion was there ever raised a concern that by opting into the federal exchange we were losing anything — especially subsidies,” said Tim Ervolina, president of the United Way Foundation of South Carolina and a former planning committee member. “I recall a very intense discussion with (former) Sen. (Mike) Rose, who stated that, after reviewing the law, he felt confident that we had nothing to lose and everything to gain by opting into the federal exchange.”
But some Obamacare critics, including S.C. Attorney General Alan Wilson, have recently argued that the Affordable Care Act clearly spells out that subsidies may only be used by customers in states that set up their own insurance marketplaces. If the Supreme Court sides with this argument, coverage will become unaffordable for millions of people across the country, including tens of thousands in South Carolina. Subsidies, on average, reduce the price of insurance in this state from $367 to $84 a month. Nearly 90 percent of customers who buy insurance on HealthCare.gov in South Carolina qualify for some level of financial aid.
“It's a very important decision that's going to have huge repercussions for everyone,” said Christian Soura, director of the S.C. Department of Health and Human Services. “The whole system is built on some set of assumptions about how the (Affordable Care) Act works — (subsidies) are one of the foundational assumptions.”
The Washington Post reported Tuesday that several state-level officials across the country said they did not understand three or four years ago that subsidies were at stake.
“I don't believe there was general awareness at the state level at that time,” said Tony Keck, another member of the S.C. Health Exchange Planning Committee and the state's former Medicaid director. “In fact, I know there wasn't because we considered both options equal in terms of subsidies.”
While Keck would not speculate how this knowledge would have shaped the South Carolina committee's debate or its final recommendations, some Affordable Care Act advocates who participated in the committee meetings say it wouldn't have mattered anyway because Haley had her mind made up all along.
“The committee ... would have never allowed a state-based exchange; it was stacked that way,” said Sue Berkowitz, director of the S.C. Appleseed Legal Justice Center.
Frank Knapp, president of the S.C. Small Business Chamber of Commerce, said, “This (subsidy) issue was never a thought in anyone's mind.”
“The (committee's) outcome would have been the same, only faster with less debate,” he said, “since in the opponents' minds, not creating the state marketplace would be the death of Obamacare.”
Emails released to The Post and Courier in 2011 show Haley opposed the idea of creating a state-based Affordable Care Act marketplace long before the committee she established with a $1 million federal grant made any conclusions.
“The whole point of this commission should be to figure out how to opt out and how to avoid a federal takeover, NOT create a state exchange,” Haley wrote at the time.
This week, Haley spokeswoman Chaney Adams defended the governor's decision.
“The decision was made based on the fact that the federal government was sticking states with the cost and responsibility of a massive new bureaucratic program without giving us the flexibility to decide what is best for our people,” Adams wrote in an email. “One only has to look at the massive failures in Oregon to see that the right decision was made for South Carolina, and Governor Haley would make it again today.”
Oregon's insurance marketplace, one of 14 state-based marketplaces in the country, has been plagued with technical problems. Other state-based marketplaces launched much more smoothly.
Meanwhile, the fight to derail the Affordable Care Act in South Carolina continues. Four conservative state lawmakers recently filed a bill in the General Assembly that prohibits state employees and public officials from establishing a state-based insurance marketplace or enforcing Obamacare. Similar bills were filed in 2013 and 2014, but were not passed into law.
Reach Lauren Sausser at 937-5598.