Medicaid growth in South Carolina will require the state to spend $467 million more next year, according to the state Department of Health and Human Services. The state's portion of that will be almost $150 million, with the rest being federal matching money.
State DHHS director Tony Keck says the increase will bring the state's Medicaid budget to almost $7 billion a year. "Which is really out of control," he says. "It's starting to eat into all the other things that the state needs to spend money on, in terms of education, in terms of improving roads, deepening the port. And we can't continue like that."
The growth is not from expanding the number of people who qualify for Medicaid; it's simply from people who already qualify but are not enrolled in the program, Keck says. He expects almost 200,000 more people to enroll next year, prompted by the attention on the federal health care reform law and its requirement to have health insurance, as well as the state's efforts to reach out to people who do qualify but are not enrolled.
Keck says since Medicaid is a federal entitlement, the state cannot deny it to people who qualify. That means state lawmakers have few choices. They can pay for the additional Medicaid cost from the general fund budget, which means less money for other needs like schools and law enforcement; or the agency will have to find cost savings and possibly reduce payments to doctors and hospitals. "We don't like to reduce rates because we want to make sure that our providers are paid fairly, to keep access high and keep quality high," Keck says.
He says the agency does have some cash reserves, and he expects lawmakers to require the agency to use some of that money first.
Sen. Tom Alexander, R-Oconee, chairs the Health and Human Services subcommittee of the Senate Finance Committee. Talking about the $150 million state portion of the Medicaid increase, he says, "It certainly will be a challenge for us to come up with that amount of money."
The budget is still in its very earliest stages. This is a "rough draft" that HHS gave to Gov. Nikki Haley. She will later meet with state agencies as she puts together her executive budget, which she's expected to release in December or early January.
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