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 2014-2016 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 2014
2% of household income in 2015
2.5% 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
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January 1966--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 1968-1972
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?
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
health insurance matters
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%
$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
Individual
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
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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
$2,601,505,270
$11,706,700,000
TOTAL CUTS WITH OR WITHOUT MEDICAID
EXPANSION FROM 2014-2020.
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)
$ 28,673,000 HHH
$ 6,309,000 CCH
TOTAL CUTS WITH OR WITHOUT MEDICAID
EXPANSION FROM 2014-2020.
$ 34,982,000 Total
$40,940,000
$17,742,000
$58,682,000
HHH
CCH
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:
www.schalead.org
 Sign Petition: www.RemedySC.com
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?