Medicaid expansion could cover 360,000 more people in SC, new report says

Info about Medicaid eligibility and stethoscope. (iStock / Getty Images Plus)

COLUMBIA — Expanding Medicaid eligibility would give 360,000 additional South Carolinians full health insurance coverage in its first year while costing the state more than $250 million, according to a report released Thursday.

South Carolina is one of 10 states in the country that has not expanded Medicaid eligibility to cover all adults with incomes up to 138% of the federal poverty level. The 2010 federal health care law intended for that to be a mandate before a U.S. Supreme Court ruling two years later made it optional for states.

As other Southern states started expanding eligibility for Medicaid in recent years, Cover SC, a coalition of nonprofit organizations across the state, started asking what made the difference for their legislators.

In states like North Carolina, which started enrolling more people last December, coalition members found that much of the decision came down to finances, said Teresa Arnold, chair of the coalition.

“What we learned is that this economic report showing the benefits county by county by county was really one of the things that really made a big impact,” Arnold told coalition members and reporters Thursday.

What expansion could look like in SC’s biggest counties

The following is the number of people in the five most populous counties who could be fully covered by Medicaid if the state expanded eligibility for 2026:

• Greenville County: 21,409
• Richland County: 20,516
• Charleston County: 15,519
• Horry County: 18,271
• Spartanburg County: 16,223

Source: Cover SC report

So, the coalition commissioned its own study to look at the potential effects of expansion in South Carolina, Arnold said.

Under South Carolina’s existing eligibility rules , non-disabled, non-elderly adults without children don’t qualify for full coverage by Medicaid. Parents can qualify if they make 67% of the federal poverty level or less, which is just $16,650 per year for a family of three. Children 18 and under still qualify if their parents earn at or below 208% of the poverty level, or a maximum of $53,706 for that same family of three.

Around 100,000 of the people who would be fully covered by expanding eligibility already receive some benefits under what the state calls the “family planning” program for adults below 195% of the poverty level, according to the report. The limited plan covers health services to prevent pregnancies, such as birth control, and preventive exams — but not the care if those exams find something wrong.

Those are some of the most restrictive eligibility requirements in the country, the report found.

More than 450,000 people in South Carolina, or about 11% of its population, are uninsured, according to the study. Expanding Medicaid eligibility would allow more of those people to access health care, said Leighton Ku, a George Washington University researcher who wrote the report.

“We know for sure that Medicaid expansion lowers the number of uninsured and improves access to medical and mental health care services,” Ku said.

The cost

The federal government would cover 90% of the cost of expanding eligibility, which would amount to around $2.5 billion if the program started in 2026, the first year it could feasibly begin should the Legislature decide next year to approve an expansion. That would leave the state to cover $270 million, according to the report.

As the state rapidly grows, population changes, as well as inflation, could cause the numbers to change if the state waited to expand eligibility until later years, Ku said.

Some additional federal funding could cover the cost of the first couple years of expansion. Under the American Rescue Plan Act, if South Carolina expanded eligibility in 2026, it would receive an extra $435 million in its first year of expansion and $469 million in its second year.

That would more than cover the state’s portion of the cost for the first two years. The money is able to be rolled over year after year, so the state could use the bonus to cover at least part of the third year’s cost as well, Ku said.

After that, though, the state would remain on the hook to cover the rest of the cost, which would be expected to grow to $356 million by 2028 if the program began in 2026.

The study estimates that expanding eligibility would bring in more health care workers and businesses, translating to more spending and increased tax revenue. That could equate to $112 million in county and state taxes in the first year, from an estimated $3.9 billion increase in spending both directly and indirectly by the potential new jobs generated.

“That’ll help alleviate some of those costs for the state and also give counties a little more money to help meet their needs,” Ku said.

Would SC expand Medicaid?

Expanding Medicaid eligibility seems highly unlikely in a state with a GOP-dominated Legislature and a GOP governor who has repeatedly rejected the idea.

“I don’t see any real willingness to entertain that policy idea,” Senate Majority Leader Shane Massey, R-Edgefield, told the Daily Gazette.

Case in point, Massey said, was a clause in the state budget that would have created a committee to look at all kinds of potential health care system reforms, including expanding Medicaid eligibility.

The directive to simply study the idea was among items Gov. Henry McMaster struck from the state budget. In his July 3 veto letter, McMaster called it a “worthy endeavor” to look at changes to create affordable health care, while reiterating his opposition to Medicaid expansion.

“Special interest groups have been issuing reports like this for years, claiming that billions in new spending for Medicaid expansion will create new jobs and prosperity,” the governor’s spokesman, Brandon Charochak, said Thursday. “The governor remains unconvinced.”

The veto will stick. Legislative leaders have no plans to call the chambers back to Columbia for a special override session. And even if they did, advocates likely couldn’t muster the supermajority votes in both chambers needed to override that one.

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

While the cost to the state is a concern, so is the idea of putting more power into the hands of the federal government, Massey said.

“I think that’s culturally destructive to give free stuff to able-bodied adults,” he said.

Arnold pushed against that idea. Take, for instance, a man she knew whose kidney failure caused him to lose his job and, with it, his health insurance. With no income and no insurance, he couldn’t pay for the treatment he needed to get back on his feet, she said.

“If we had had Medicaid expansion, he would have been able to get his health care. He could have gotten his job back,” Arnold said. “He could have been a working member of our society. Instead, he got sicker and sicker.”

Sen. Tom Davis, who proposed the study committee, said he plans to keep looking at potential changes to the state’s health care system during the legislative session starting in January.

Whether that will include expanding Medicaid eligibility will depend on what he finds, he said. While he’s not sure whether he would support an expansion himself, it’s worth considering, the Beaufort Republican said.

“It’s important to make a decision on facts and information and alternatives,” Davis said.

The other states that have not expanded Medicaid eligibility are Alabama, Florida, Georgia, Kansas, Mississippi, Tennessee, Texas, Wisconsin and Wyoming, according to KFF , a national health-focused nonprofit.

Editor’s Note: The name of the coalition has been corrected to Cover SC.

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