medicaid expansion

expanding coverage under aca  Medicaid Expansion:  Will cover 250,000 uninsured in SC  By 2014 states can extend Medicaid eligibility to all legal residents up to 138% of poverty and under 65 years old  138% FPL is about $16,000 for individual and $32,500 for family of 4  From the federal government will cover 100% of state costs  Health Insurance Exchange  Subsidies for legal residents 100% to 400% FPL  100% FPL is $11,450 for individual; $23,550 for family of 4  400% FPL is $45,960 for individual; $94,200 for family of 4

Individual Mandate  Beginning Jan. 1, 2014, US citizens and legal immigrants must have coverage or pay a penalty when they file their federal tax returns.  Individual penalties $95 per person in 2014 $325 per person in 2015 $695 per person in 2016  Household penalties 1% of household income in % of household income in % of household income in 2016 *Exemptions for hardship 2014

supreme court  Ruled 5-4 on June 28, 2012 to uphold law  Individual mandate, exchanges, insurance rules and other programs still stand  Medicaid expansion is now optional for each state

the political question: what will states do?

some background  January only six states originally participated when the program launched: Hawaii, Illinois, Minnesota, North Dakota, Oklahoma, Pennsylvania  20 states signed on later that year  11 states joined in 1967  13 more states (southern) joined in  Arizona last to join in 1982  Eventually all states participated in basic program and SCHIP (enacted in 1997)

who will benefit?

why are states reluctant?  Oppose Obama…… Oppose ObamaCare  States Rights  Administrative burden  10 percent is still a big commitment  Fear the federal government will not keep its financial commitment  The “welcome mat” effect

who’s participating? 25 states participating 14 states officially not participating Primarily southern states including South Carolina All but two also not participating in a state-run insurance exchange

changing their tune  Florida Gov. Rick Scott dropped his staunch opposition  "While the federal government is committed to paying 100 percent of the cost of new people in Medicaid, I cannot, in good conscience, deny the uninsured access to care.”  Arizona Gov. Jan Brewer plans to push for expansion  “Weigh the evidence and do the math. With the realities facing us, taking advantage of this federal assistance is the strategic way to reduce Medicaid pressure on the State budget. We can prevent health care expenses from eroding core services such as education and public safety, and improve Arizona’s ability to compete in the years ahead.”

haley vowed not to expand medicaid

governor haley’s explanation Governor Haley believes this (ACA) expansion “will ultimately hurt the poor, hurt South Carolina, and hurt the country by doubling down on a system that already delivers some of the lowest value in the world.” Haley argues there is already sufficient money in the system to support excellent health care for South Carolinians, but the process of delivering that care is wasteful.

how much will the medicaid expansion cost sc?

health insurance matters

 State Medicaid expansions to low-income adults are associated with significant reductions in death and improvements in access, particularly in poor, rural areas. Mortality and Access to Care among Adults after State Medicaid Expansions, Harvard School of Public Health, NEJM, July 2012

2010 Federal Poverty Levels 100%133%150%200%300%400% Individual $10,830$14,404$16,245$21,660$32,490$43,320 Family of 4 $22,050$29,327$33,075$44,100$66,150$88,200

the new coverage gap  Families of four making as much as $94,000 a year will receive subsidies to help buy health insurance  Many poor, uninsured South Carolinians would receive no coverage assistance through ACA if SC opts out of the Medicaid expansion  Parents in low income families of four making between $11,800 and $23,500 a year  Childless adults making under $11,000 a year  13,000 veterans and their spouses  65,000 uninsured citizens age 50-64

the business of hospitals  Among largest employers in the state  Two of the top five employers in SC are hospitals  Nearly 86,500 employees  $3.8 billion in wages and salaries  $1.5 billion in total capital expenditures  SC ranked by the federal government as one of the top five states making the most improvements in the quality and safety of health care.

the business of Hilton Head Hospital  HHH one of largest employers in county  505 of employees  $ 30,317,431 in wages and salaries  $ 2,423,334 in total capital expenditures  SC ranked by the federal government as one of the top five states making the most improvements in the quality and safety of health care.

statewide impact $11,706,700,000 The total amount our state would receive in federal funding from 2014 to 2020 if South Carolina decides to expand Medicaid.

Local hospital impact (HHH-CCH) $40,940,000 HHH $17,742,000 CCH $58,682,000 Total The total amount (Your Hospital) would receive in federal funding from 2014 to 2020 if South Carolina decides to expand Medicaid.

impact on business “Pressures will be greatest in states that opt out of Medicaid expansion, but have a relatively high proportion of uninsured residents” Moody's, "Reduction of Medicaid & Medicare Disproportionate Share Hospital Payments a Looming Challenge for States and Hospitals.” March 14, 2013

impact on business “Premium increases would be even higher among those states that do not expand Medicaid. Premium increases would be borne by nonsubsidized purchasers and by the federal government… Exchange premiums also may increase…” American Academy of Actuaries, “Implications of Medicaid Expansion Decisions on Private Coverage” September 2012

impact on business The average individual market and exchange premium will be $120 higher annually if SC does not expand Medicaid. The Society of Actuaries, “Exposure Draft: Cost of the Future Newly Insured under the Affordable Care Act” December 2012

usc economic impact report  SCDHHS estimates $11.2 billion in new federal funding will be generated between 2014 and 2020 due to newly eligible enrollees.  By 2020, the annual economic impact will total $3.3 billion in annual economic output, nearly 44,000 jobs, and approximately $1.5 billion in labor income.  This will translate into additional spending, leading to increases in SC general funds totaling $105.6 million by 2020.

usc economic impact report  This increased tax revenue will completely offset the required state costs over the first seven years and generate a $9 million net surplus.  From 2020 forward after the federal match rate caps at $9 federal to every $1 state, new tax dollars will generate enough to cover 53% of the state required Medicaid match.

annual fiscal impact Year Required State Match State Administrative Costs State Tax Revenue Generated Net Cost to South Carolina 2014 $0$27.6m$45.6m-$18.0m 2015 $0$28.2m$94m-$65.8m 2016 $0$25.5m$96.8m-$71.3m 2017 $44.1m$26.4m$98.7m-$28.2m 2018 $101.5m$27.3m$99.9m$28.8m 2019 $125.3m$28.3m$103.3m$50.2m 2020 $171.3m$29.3m$105.7m$94.9m Totals $442.2m$192.6m$644.1m-$9.3m

medicaid expansion: a good roi  SC has invested millions to attract BMW and Boeing.  SC has invested countless state dollars to draw down federal highway funds and funds to deepen the Port of Charleston.  Why is it any different for healthcare?  An investment in Medicaid will:  improve access to health care for low-income workers  make businesses more competitive  and generate a 9-1 match over the long haul

what you can do?  Communicate with legislators  Engage local chambers of commerce, businesses and civic organizations  Write letters to editor  Join the South Carolina Hospital Association’s Grassroots Program:  Sign Petition:

legislative effort for expansion  Ultimate decision will be made through the legislative budgetary process  Every legislator is important  2/3 to override a veto

key messages on medicaid expansion  If we don’t act now and expand Medicaid, South Carolinians' federal tax dollars will be sent to Washington, DC or the other states that are expanding Medicaid. This plan keeps your tax dollars at home in South Carolina.  An additional 250,000 uninsured South Carolinians will gain insurance coverage under this expansion, easing the burden on rural hospitals.  Refusing Medicaid expansion means that South Carolina businesses and insured accept a higher burden of cost for caring for the uninsured.  Medicaid expansion will help pay for itself.

despite concerns, these facts remain:  SC hospitals will continue to care for uninsured patients; federal law requires them to do so.  The cost of that care must be paid by someone, and there are two options:  We can let the other states help pay 90% of it (they are offering to do so through Medicaid), or  We can absorb 100% of the costs within our borders. Which strategy will make SC more competitive?