SC Vulnerable to Medicaid Cuts in New Health Care Bill, Report Says

As Congressional Republicans unveil their Obamacare repeal and replace bill, a new report concludes that South Carolina is among the states that stand to lose the most from the Medicaid cuts included in the measure.

The Palmetto State ranks among the worst for poverty and other risk factors that make it particularly vulnerable to Medicaid cuts, said Robin Rudowitz, associate director for the Kaiser Family Foundation’s Program on Medicaid and the Uninsured.

Those factors, combined with the decision not to expand the Medicaid program under Obamacare, also known as the Affordable Care Act, means South Carolina may be forced to make some tough choices in the event of Medicaid cuts, she said.

“In a state like South Carolina, when the federal government says we’re ... shifting costs to states ... the state has to decide, maybe we can’t cover that new drug or that service or cover that gap,” she said. “Each state has to make that hard choice.”

Nearly 1 million South Carolinians — three quarters of them in working families — are covered by Medicaid and the Children’s Health Insurance Program, or CHIP, according to Kaiser.

That’s about one in five people, including two in five children, two in five people with disabilities, and three in five nursing home residents. Indeed, Medicaid makes up one of every two dollars spent on long-term care.

That means cuts could set the stage for a "Medicaid Hunger Games" where leaders play needy groups against one another — children against the elderly, the chronically ill against the catastrophically ill, the traumatically injured needing rehab against the substance-addicted, said Columbia health care consultant Lynn Bailey.

“South Carolina has 20,000 nursing home beds and about half of those are funded by Medicaid,” she said. “What will happen to middle-class people who have an elderly parent in a nursing home? What happens with middle-class folks who outlive their assets?”

And Sue Berkowitz, executive director of the South Carolina Appleseed Legal Justice Center, said Medicaid cuts will be incredibly harmful to South Carolinians.

"Through (spending) caps, we will have a huge hole thrown into our budget,” she said. “And we’ll have to decide what’s more important to fund — elderly or kids or disabled people or maternity care. So many things could end up on the chopping block.”

Top Five

The Kaiser report looks at 30 risk factors that threaten coverage. In addition to poverty, they include unemployment, poor mental health status, percentage of minorities, high health expenditures per capita, high share of people going without care because of cost, high population in a provider shortage area, high Medicaid match rates, low eligibility levels and low state Medicaid spending.

And South Carolina is one of 11 states that rank in the top five for five or more of those risk factors, Rudowitz said. The other states are mainly in the South as well — Alabama, Arizona, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, Texas, and West Virginia.

For example, at $4,169, South Carolina is second to last in spending per beneficiary, behind only Nevada at $4,003, according to the report. And it has among the most restrictive eligibility requirements for adults.

It ranks 42nd among states for health status, and its rates of opioid deaths and HIV infections are higher than the national average, the report shows. It also has low personal income and taxable resources.

And at a nearly three-to-one federal Medicaid match rate, it has the third highest match in the country behind only Mississippi and West Virginia, Kaiser says.

While it’s hard to estimate the impact on individual states because it’s unknown how they will respond, Rudowitz said that states with multiple risk factors like South Carolina face even harder times because there’s not much room to cut.

And the Congressional Budget Office estimated that 14 million people would lose Medicaid coverage by 2026 in the House measure, she said.

States will have only so many options when dealing with cuts, according to Kaiser: raising taxes or making other budget cuts, reducing Medicaid benefits not required by law such as prescriptions or dental care, limiting the coverage of high-cost enrollees like the elderly and disabled, reducing payment to providers, and policies that promote skin in the game for beneficiaries.

“There’s a real incentive to reduce eligibility for high-cost people. And that, of course, is challenging because those are people who need services those the most — the disabled and those in nursing homes,” Rudowitz said. “And a lot of states that didn’t adopt (Medicaid) expansion have limited coverage for adults, so the only place left to cut is the disabled, the elderly, people in nursing homes.”

That can mean not covering expensive but life-saving drugs, such as those for Hepatitis C, or not providing treatment for opioid addiction, HIV and mental health services, she said. Meanwhile, cutting back on some services, such as dental care, could lead to the use of more expensive services, such as the ER, she said.

South Carolina's Options

Berkowitz said that cutting Medicaid to give tax breaks to the rich is unconscionable.

“To take away health care for needy individuals to fund tax cuts for our nation’s wealthiest individuals is cold hearted,” she said. “People will die so those who are living in total comfort have more money at their disposal. It’s terrible.”

Bailey said that six of 10 people on Medicaid and CHIP are pregnant women and children. And the elderly, people with mental illnesses, and those with disabilities take up about 70 percent of the Medicaid budget.

“Many of those children are from middle-class families who now qualify for Medicaid services. What happens to them with a block grant that fixes the dollars for Medicaid?” she asked. “I don’t see our Legislature voting to increase funding with state dollars.

“And I can’t locate anyone in state government at this point in time that’s seriously discussing what South Carolina’s options are.”

Gov. Henry McMaster is encouraged by many aspects of the Senate version of the bill released Thursday, his spokesman Brian Symmes said.

"What the Governor has made clear many times before is that he thinks Obamacare has failed and that it's imperative that we replace it," he said. "The Governor will follow (the bill) closely as it's debated on the Senate floor and is looking forward to evaluating how it will affect South Carolinians."

‘Reach Across the Aisle’

Saying there are human beings behind the numbers, state Rep. Leola Robinson-Simpson, D-Greenville, a member of the House Medical, Military, Public and Municipal Affairs Committee, predicted the Medicaid cuts will be a death sentence for many who won’t have access to medical care.

“Groups that would be impacted the most by these cuts are individuals who are in high poverty, the elderly, the unemployed, African-Americans. My heart goes out to individuals among us who depend on Medicaid,” she said. “Without it, how will they get the life-sustaining treatment they need?”

And she characterized tax cuts for the rich at the expense of the poor and elderly as selfish, saying such public policies are not “what Christ stood for.” She supported the Medicaid expansion in the state.

“It’s very troubling given our current dilemma in trying to produce a budget in South Carolina ... and because the state won’t be able to fill in the gap,” she added. “I’m hoping we will reach across the aisle and do what’s best for South Carolina.”

State Sen. Thomas Alexander, R-Oconee, said it’s premature to comment on what may be coming out of Washington.

“Hopefully there will be additional work on it before we see the final product as to what the potential impact would be. And I believe that our General Assembly would want to make sure services to the most vulnerable citizens of our state are protected,” he said.

“But if we have significantly less money from the federal government, it will provide a challenge for us to deal with,” he said. “We’ll continue to monitor what they do and look at potential impacts.”

Alexander, a member of the Senate Medical Affairs committee, said it’s important for Congress to get input from stakeholders before crafting a final bill, and that states get more flexibility to provide the programs that are best for them.

“We put together a good solid, conservative program in South Carolina with the understanding that it helps a lot of children and our senior population,” he said. “I think we’ve been pretty solid in that commitment across the board to those who rely on Medicaid.”

Berkowitz said the state is unlikely to be able to make up the difference from the cuts.

“We’ve seen what an incredibly difficult time they have in just doing things like funding our roads and education. To come up with an additional $200 million a year over the next 10 years seems almost impossible. Unless the Legislature suddenly wants to raise taxes. And I don’t see them doing it for poor people for health care,” she said.

“I hope that our state representatives and senators are watching this because they’re going to be left holding the bag, and there will be no money in that bag to help people.”

Tough Decisions

On the Congressional side, U.S. Sen. Lindsey Graham said he'll review the legislation to ensure that if it becomes law it would be beneficial to South Carolina.

"Every day brings fresh evidence that Obamacare is moving toward eventual collapse," he said. "There are now more than 40 counties across the U.S. which will not have a health care provider offering coverage on the Obamacare exchange. In South Carolina, the situation is not much better as we are down to one provider ... and that provider has expressed doubts about whether they can afford to continue to offer their product.

"Finally, South Carolinians want Obamacare repealed and replaced with something better. Only after a careful review of the legislation will I be able to determine if this bill achieves those goals."

But U.S. Rep. James Clyburn, D-SC, blasted the proposed cuts.

“The Medicaid cuts Congressional Republicans are pushing in their Trumpcare legislation are feckless and reckless,” he said. “These cuts would have devastating consequences for South Carolina families.”

Rep. Jeff Duncan declined comment because the situation is too hypothetical, his spokesman said. Sen. Tim Scott and Rep. Trey Gowdy could not be reached for comment.

The House version of the bill proposed cutting Medicaid spending by $834 billion from 2017 to 2026, according to Kaiser, by reducing federal funding to states through a per capita cap or block grant.

Cuts like that would lead to the closure or bankruptcy of 12 hospitals in the state, Bailey said.

“This would leave parts of South Carolina a health care dessert — mostly rural and poor,” she said. “Even those who have for-profit owners or large not-for-profit system aren’t immune to the economics of losing Medicaid funds.”

South Carolina Hospital Association spokesman Schipp Ames said that less federal funding will force the state to make tough decisions on spending and reimbursement rates that could lead to a reduction in services.

“The American Health Care Act would hurt the poorest states like South Carolina the most, by shifting more and more of the cost of Medicaid from the federal government to the states,” he said.

“South Carolina has struggled to fight the opioid epidemic and confront chronic conditions like obesity, in part because so many of us lack access to affordable health coverage," he added. "The ... American Health Care Act would put South Carolina in the cross hairs, by further limiting federal funding for safety net programs like Medicaid.”

 

© Gannett Co., Inc. 2017. All Rights Reserved


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