The Health Care Debate in South Carolina

A SNAPSHOT OF WHERE WE ARE

Obamacare by Another Means

While the governor and Speaker of the House are promoting what they call an “alternative” to Obamacare’s expansion of Medicaid, the truth is that their plan amounts to virtually the same thing.

It’s true that the House recently objected to outright Medicaid expansion via the state budget. Instead, however, the body adopted a set of provisos (one-year laws that direct agencies to spend money in the way the General Assembly dictates) that would accomplish the federal law’s  overhaul – most notably direct payments to hospitals for uncompensated care.

In the weeks leading up to the House vote on Medicaid expansion, the South Carolina Hospital Association (SCHA) lobbied the House intensely for expansion. The SCHA started a petition drive and held several advocacy days at the State House.

The reasons for SCHA’s energetic advocacy of Medicaid expansion require a little explanation. Back in 2009, the American Hospital Association helped to negotiate the Patient Protection and Affordable Care Act, later popularly termed Obamacare, by agreeing to Disproportionate Share reductions with the stipulation that Medicaid be expanded. What the hospital group did not know at the time is that the U.S. Supreme Court would rule that states are not required to accept the Medicaid expansion. Having banked on an unconstitutional provision of the law, therefore, state hospital groups are now facing heavy losses of government money. (Read SCHA’s more euphemistic interpretation here.)

That is presumably why Gov. Haley and legislative Republicans think taxpayers should provide some relief to the hospitals; hence the “alternative” plan. Whatever their reasons, however, the price tag for just this one component of the House-passed budget is a very considerable $20 million – $14 million of which will come from none other than the federal government. The total cost of this proposal is $83 million, with $62 million coming from state funds.

But once the federal funds are no longer available, lawmakers will almost certainly be forced (politically speaking) into making up the difference with state dollars. In the end, either taxes will have to be raised in order to keep the scheme alive or the state will have to opt into Obamacare’s Medicaid expansion after all.

Just Saying “No”

One popular misconception – a misconception explicitly circulated by the Hospital Association– is that if South Carolina doesn’t accept the Medicaid expansion, the money will just go to another state. That is flatly untrue. Whatever Medicaid funds South Carolina doesn’t draw down from the federal government will not get spent in any state.

So the federal price tag matters – a lotAn expansion of Medicaid in South Carolina would entail the federal government spending an additional $17 billion over the next ten years – in just one state. That is a massive amount of money (as a comparison, our entire state budget comes to $24 billion), and turning it down would mean the federal government wouldn’t spend it at all. With four straight years of federal deficits greater than $1 trillion, the American republic has reached a point at which further dramatic spending increases are totally irresponsible, whatever special interest groups allege.

Nullification

House lawmakers had an opportunity today to stop the implementation of Obamacare in its tracks. H. 3101 – the Freedom of Health Care Protection Act – while not perfect, would have gone a long way toward blunting the most harmful consequences of Obamacare. Instead of improving the bill – we outlined some components such legislation should have here – the House Judiciary subcommittee on Constitutional Laws essentially removed all enforcement mechanisms – making the law, if it were to pass, pointless.

 

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