Maximize Medicaid funds for SC health, economy

The State,  January 23, 2017
Florence Morning News, January 26, 2017
Lexington County Chronicle, February 2, 2017

FRANK KNAPP JR. Guest Columnist

GOP governors were in Washington last week to advocate for the protection of the extra federal funds their states have been receiving because they have expanded Medicaid under the Affordable Care Act, which is now being threatened with repeal.

The governors know that Medicaid’s health insurance for low-income working Americans is not going away, but they expect is that Congress and President Donald Trump will turn it into a block grant program to the states that will cap federal spending but give them much more flexibility in how they use the money.

Their concern is that they could lose most or all of the billions of extra federal dollars they have been receiving compared to South Carolina and 18 other states that have not expanded Medicaid. That money is crucial to their state and local economies.

For example, in 2014 Arkansas became the first state to expand Medicaid through a federal waiver that allowed it to use the money to purchase private health insurance for recipients. This meant the state could use federal dollars instead of state funds to pay for the health care of prisoners and institutionalized mental patients. As a result the state income tax was cut by more than $100 million the first year.

Republican Govs. Jan Brewer of Arizona and Chris Christie of New Jersey used expanded Medicaid funds to keep their rural hospitals financially healthy, which has kept small businesses from going under.

But if the federal funds are allocated based on existing funding levels, what happens to states such as South Carolina that did not expand Medicaid?

The likely answer is they, we, will have missed the boat. A state like Arkansas would receive far more federal dollars than South Carolina even though our states have similar demographics.

More low-income citizens in Arkansas will have affordable health insurance and thus will be healthier and more productive workers for small businesses. Arkansas’ rural hospitals will continue to be in better fiscal shape, keeping their local economies alive.

Is this fair to South Carolina? After all, our GOP governor, incorrectly claiming that we couldn’t afford to do it, was simply being a good partisan, following the party’s opposition to Obamacare.

Fair or not, it now appears that the Palmetto State will be punished for that political loyalty, ironically at the hands of a Republican Congress and president.

However, it is not too late to be on record as taking steps to expand Medicaid and thus being able to make the argument that South Carolina also should be in line for additional federal funds when block grants are enacted.

Our General Assembly and soon-to-be-new governor should act quickly to demonstrate to the Trump administration and Congress that we should be treated as if we had already expanded Medicaid.

We can do this in two ways.

The Legislature could quickly pass legislation modeled after Arkansas law to expand Medicaid using a private option. A provision could even be included in the statute saying it would go into effect only if Medicaid becomes a state block grant program.

Second, the Legislature could simply instruct our state Medicaid agency to begin negotiating with the federal government about Medicaid waivers for an expansion plan that would result in our receiving an increased level of federal funding and the same favorable state match as the expansion states.

Time is running out for South Carolina to take action to earn Medicaid parity with 31 other states.

Mr. Knapp is the president and CEO of the S.C. Small Business Chamber of Commerce; contact him at



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