Close the Health Insurance Coverage Gap

The South Carolina Small Business Chamber of Commerce supports closing the coverage gap for the state’s low-income citizens.  We are active, proud partners of Close The Gap SC, a coalition of organizations advocating for the passage of Senate Bill 845 that would create a private option, Palmetto Plus, to expand Medicaid in the state.  This legislation is modeled after successful programs in other Southern as well as other states with Republican Legislatures and Governors.

Approximately 123 thousand low-income South Carolinians, over half of them working, do not have health insurance because they fall below 100% of the federal poverty level and thus do not qualify for premium assistance in the Health Insurance Marketplace. At the same time these citizen do not qualify for our state’s traditional Medicaid.  This coverage gap includes nearly 10 thousand veterans, 47 thousand folks between the ages of 50 and 64 and one in six women working part-time.

South Carolina small businesses also have a strong interest in this coverage gap for low-income citizens.

First, there is a significant cost to a small business when workers are not on the job because they are sick or have to care for a family member who is ill.  Even employees who don’t miss work when they are sick are less effective.  Workers with health insurance for themselves and their families miss less work due to illness and are more productive.

Second, small businesses that want to offer health insurance to employees will find it more affordable if low-income workers already have health insurance because the employers will have fewer workers to cover with group health insurance plans. In addition eliminating the “hidden tax”, the cost uncompensated care for the uninsured shifted to private insurance, will help reduce the pressure to increase premiums.  This “hidden tax” in 2010 had been estimated by Milliman, Inc. to be $1000 annually for every family health insurance plan.

Third, closing the health insurance gap for low income workers would eliminate the potential penalty under the Affordable Care Act to businesses with 50 or more employees that have any employee obtain health insurance through the Marketplace instead of from the employer. All businesses with 50 or more employees must offer affordable health insurance to all workers in 2016.

Yet in spite of the benefits to low income citizens and to small businesses, every day South Carolina is refusing upwards of $4.7 million dollars in federal assistance that would close this insurance coverage gap for our people and small businesses. Arkansas, Kentucky, New Jersey, Pennsylvania and 24 other states are accepting this federal assistance to close the coverage gap for their low-income citizens.  And these states are creating jobs.

Kentucky and Arkansas have already created and are projected to create thousands of new jobs after they expanded their traditional Medicaid program or enacted private market plans to cover the uninsured.  Southern states are experiencing an economic shot in the arm and improving their health. Growing greater health insurance options, like Palmetto Plus, will create new jobs in numbers that dwarf high-profile South Carolina projects like Boeing (7,500 jobs), BMW (7,000) or Volvo (4,000 projected).

Palmetto Plus is a proposal that will lead to savings for South Carolina taxpayers. Similar to other conservative Southern states’ experiences, cost savings in South Carolina could lead to dependable private health insurance options for people who fall into the insurance coverage gap.

According to a 2015 study from the Robert Wood Johnson Foundation, states like Arkansas and Kentucky are realizing savings caused by

  • Replacing state general funds with federal Medicaid dollars for programs and services for the uninsured in mental and behavioral health programs, public health programs, and health care services for prisoners.
  • Savings related to increased federal dollars for certain newly-eligible health insurance enrollees, including pregnant women and people with disabilities.
  • Revenue gains related to existing insurer or provider taxes.

Now it is South Carolina’s turn.  The $1.7 billion a year we turn down would help both our low-income uninsured citizens and local economies.

We need to close our coverage gap.


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