SC could consider merits, drawbacks expanding Medicaid, following other states

Sen. Tom Davis during a Senate Finance Committee meeting in Columbia, S.C. on Wednesday, April 10, 2024. (Travis Bell/STATEHOUSE CAROLINA/Special to the SC Daily Gazette)

COLUMBIA — As more states expand access to Medicaid, some legislators want a committee examining health care in South Carolina to consider the merits and drawbacks of the program.

This would be the first time Palmetto State lawmakers have seriously considered expanding Medicaid eligibility as intended by the 2010 federal health care law since a U.S. Supreme Court ruling two years later made it optional for states, said Sen. Tom Davis, R-Beaufort, who proposed creating the committee.

South Carolina remains among the 10 states that have not expanded Medicaid to cover all adults, including single adults without children, who have incomes up to 138% of the federal poverty level.

“In the time that I’ve been here, there has not been an honest conversation about the pros and cons of availing ourselves to that option,” Davis, first elected in 2008, said during last month’s Senate budget debate.

A clause included in the Senate’s version of the state spending plan would create a legislative committee to consider various ways to improve access to health care in South Carolina, including how to increase the number of physicians, lower drug prices, relieve medical debt and increase competition among health care providers. The panel would be tasked with reporting its recommendations by Dec. 1.

Whether the clause makes it to the final budget package for the fiscal year starting July 1 remains to be seen. Budget negotiations between the House and Senate on their separate spending plans have yet to officially start.

But Davis said he’s optimistic that the House will agree to keep the health study committee. No senators raised concerns about the general idea of addressing health care barriers.

However, including Medicaid in the mix raised some eyebrows.

During floor debate on the budget, Sen. Wes Climer tried to remove the line asking the panel to consider what would happen if the state “expanded eligibility for Medicaid as provided for in the Patient Protection and Affordable Care Act.”

“It is unconscionable to me that we would consider expanding that to more — to put more South Carolinians into dependency on the government instead of encouraging them to seek employment and private health insurance elsewhere,” said the Rock Hill Republican.

Senators rejected his attempt to remove the Medicaid line 34-10, with all 10 votes coming from Republicans.

Nearly 1.2 million South Carolinians were enrolled in the state’s full Medicaid program, as of March 1, according to the state’s Medicaid agency.

Advocates for expansion acknowledged there’s still a long way to go before the state seriously considers giving more people free health care access. But this could be a promising first step, said Sue Berkowitz, an advocate for the poor with Appleseed Legal Justice Center.

“If we educate ourselves and we study, then we can make informed factual decisions,” Berkowitz said. “That’s all anybody would like to see at this point.”

‘I want to know what those arguments are’

When the Affordable Care Act, also known as Obamacare, took effect a decade ago, Republicans nationwide opposed it, saying expanding Medicaid was expensive, increased government control over health care and promoted people’s dependence on public benefits. In South Carolina, GOP lawmakers continually said the state can’t afford the 10% match.

But in recent years, GOP-controlled states that once staunchly opposed Medicaid expansion have reversed course. Last December, neighboring North Carolina, the most recent to adopt the expansion, started enrolling more people.

The shift made Davis wonder: Why did those states change their minds?

“My point is this: I want to know what those arguments are,” he told his colleagues while asking them to keep Medicaid in the mix. “I want us to have that debate. I want to know what it was that persuaded them and decide for myself whether it persuades me. But we don’t do anybody any service by putting our heads in the sand and pretending that doesn’t exist.”

Simply including Medicaid expansion among a long list of things to consider doesn’t guarantee anything. The committee could find that Medicaid isn’t right for South Carolina, Davis said.

Plus, even if committee members recommend expanding Medicaid, the GOP-dominated General Assembly would then have to agree. Making it law could further take supermajority approval in both chambers to override a potential veto from GOP Gov. Henry McMaster, who has repeatedly opposed the idea of a full expansion.

Davis recognized convincing enough South Carolina Republicans to enact a Medicaid expansion would be “a steep uphill climb,” noting he too has long opposed the idea. But he said he’s going into the discussion with an open mind, and it’s possible he could support it.

“But it’s intellectually dishonest to say, ‘Let’s look at health care markets,’ and take something out that is clearly material to that discussion,” Davis said. “The report wouldn’t be worth the paper we put it on if we exclude something that important.”

During floor debate, Davis and Climer agreed on one thing: Neither wants the state’s health care to become fully government-run. How to avoid that, though, became the issue. While Davis said the state has the chance to customize its use of Medicaid dollars if it adopts an expansion, Climer argued expanding the program would only lead to more federal involvement in the market.

“The antidote you prescribe in here is the disease itself,” Climer said.

“I’m not prescribing anything,” Davis replied. “What I’m doing is listing factors that any intellectually honest person is going to say are proper subjects of inquiry.”

The federal government has become more lenient on granting states waivers for specific programs in recent years, Davis said.

“I don’t think a lot of people realize that there is that flexibility now, that there is that willingness on the federal government’s part to let states shape and tailor what happens at the state level,” Davis told the SC Daily Gazette.

But which programs are allowed often depends on who is in office, Climer said.

Work waivers

Take, for example, the state’s never-implemented work waiver program.

Lawmakers across the country have been pushing for waivers requiring people to work a certain number of hours each month as a way of expanding Medicaid. Including South Carolina, 13 states received permission under the Trump administration to require Medicaid recipients prove they were working.

South Carolina’s two waivers, approved in December 2019, would have required that a person work or volunteer at least 80 hours per month.

The waivers included a number of exceptions. Children, primary caregivers, pregnant women, new mothers, elderly people and people with disabilities would not have had to work. And people enrolled in school or a job training program would qualify.

The income limit for parents without a disability to qualify for Medicaid would have gone from the current 67% of the federal poverty level to 100% — still shy of what’s considered a full expansion under the Affordable Care Act.

State officials touted the waivers as a way of filling the gap for people who make too much to receive Medicaid but not enough for a subsidized health insurance plan. That could cover another 32,000 or so people, officials estimated in applications to the federal government.

Filling that gap could also encourage more people on Medicaid to work, or to work more, because they would no longer have to worry that falling in that gap would cause them to lose their health insurance, state Medicaid department spokesman Jeff Leieritz said in an email.

The current system “creates an irrational disincentive for parents and caregivers who are enrolled in Medicaid to earn additional income and eventually transition to another form of health coverage,” Leieritz said.

When the COVID-19 pandemic began in 2020, the state paused putting the program into place in order to comply with a different federal program, which prohibited states from taking away benefits during the federal public health emergency.

In 2021, while the emergency was still in effect, the Biden administration withdrew approval of the work waivers for all 13 states that previously received permission.

The new requirements could cause thousands of people to lose their coverage in the first year because they were not working, administrator Chiquita Brooks-LaSure wrote to South Carolina’s Medicaid agency in August 2021.

On top of that, the COVID-19 pandemic made it more difficult for people to work but increased potential health concerns, especially for low-income people, Brooks-LaSure wrote.

The program ended before anyone enrolled.

And the Biden administration has repeatedly turned down states’ requests since to impose work requirements.

But if Donald Trump wins the November election, McMaster will push again for the work program, his office confirmed.

Work waivers would be among options the committee could consider, Davis said. He said he would reserve his own judgment until he had all the facts from the study.

Proponents of expanding Medicaid have frowned on work waivers as unnecessarily burdensome for people trying to access health care. Many people on Medicaid already work, and requiring community engagement could unintentionally kick off people who can’t get a job for some reason other than the listed exceptions, Berkowitz said.

But part of the committee’s job would be presenting those concerns, she said.

“Why don’t we look at all that before we just jump into things and say, ‘This is how it has to be’?” Berkowitz said.

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