medicaid expansion in sc

medicaid expansion in sc

today’s talk

Background Politics of expansion Impact on People Impact on Business Impact on the Economy Final Thoughts

patient protection & affordable care act

On March, 23, 2010, the Patient Protection and Affordable Care Act (ACA) was signed into law

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 2014-2016 the federal government will cover 100% of state costs

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?

who will benefit?

who’s participating?

• 25 states and DC moving toward Expansion

• 4 considering • 21 states not

expanding• Many southern

states including South Carolina

• Most also not participating in a state-run insurance marketplace

how much will the medicaid expansion cost sc?

Year State State Administrative

Cost

Federal

2014 0 $19m $706m

2015 0 $19m $1.7b

2016 0 $18m $1.8b

2017 $46m $18m $1.8b

2018 $107m $19m $1.8b

2019 $132m $19m $1.9b

2020 $180m $20m $1.9b

Totals $465m $132m $11.7b

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 51,500 uninsured citizens age 50-64

the new coverage gap

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.

statewide impact

$2,601,505,270 TOTAL CUTS WITH OR WITHOUT MEDICAID EXPANSION FROM 2014-2020.

$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.

impact on state and local government

“We estimate that 3.6 million fewer people would be insured, federal transfer payments to those states could fall by $8.4billion, and state spending on uncompensated care could increase by $1 billion in 2016… In terms of coverage,cost, and federal payments, states woulddo best to expand Medicaid.”

RAND Corporation, “For States That Opt Out Of Medicaid Expansion: 3.6 Million Fewer Insured And $8.4 Billion

Less In Federal Payments,” June 2013

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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

“Hospitals and healthcare systemsoperating in states that do not expandMedicaid coverage under the ACA will facegreater financial challenges and rating pressure compared to hospitals and healthsystems in states that expand Medicaidcoverage”

Fitch Ratings “Adverse Expansion: Hospitals, States, and Medicaid”

October 28, 2013

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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

impact on business

Not expanding Medicaid could expose SC employers to $30 to $46 million in annual ACA shared responsibility payments.

Jackson Hewitt, “The Supreme Court’s ACA Decision and Its Hidden Surprise for Employers: Without Medicaid

Expansion, Employers Face Higher Tax PenaltiesUnder ACA” March 2013

economic impact in sc

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.

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

key messages on medicaid expansion

If we don’t act now and expand Medicaid, South Carolinians‘ dollars will be sent to other states that are expanding Medicaid. This plan keeps your dollars at home.

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?