‘We can’t afford it’ opposition proved wrong

The Greenville News
April 18, 2015

By Frank Knapp Jr.

When the U.S. Supreme Court ruled in 2012 that the federal government could not mandate that states expand Medicaid under the Affordable Care Act, South Carolina chose to not accept the federal money offered to pay all the cost of providing health insurance to our uninsured citizens who were under 138 percent of the federal poverty level. The primary reason given for this decision was that the state couldn’t afford the eventual 10 percent of the expansion cost that would be required by 2020.

As a result of this decision, today about 194,000 of our citizens fall into a health insurance coverage gap. These mostly working South Carolinians do not qualify for our current state Medicaid program which serves only working parents with incomes below 62 percent of the federal poverty level. Unfortunately those in the coverage gap also make below 100 percent of the federal poverty level thus not qualifying for premium assistance (federal tax credits) to purchase insurance in the state’s health insurance marketplace.

Our Close the Gap SC coalition has been arguing that it is good public policy for all South Carolinians to be insured even if we have to spend some additional taxpayer dollars to do it. We advanced our own economic counter argument to the “We can’t afford it” opposition.

We pointed out that tens of thousands of new jobs would be created if we accepted the federal dollars. We argued that small businesses would benefit from their low-income workers being healthier and thus more productive. We also included the fact that everyone’s health insurance premiums, including those paid by small businesses, would be more stable from closing the coverage gap. On this point even the state government’s own actuarial firm had acknowledged that we could better control health insurance premiums by reducing the number of uninsured which would then slow and hopefully stop the shifting of costs of health care for the uninsured to the insured.

Until now none of this advocacy has moved our elected leaders to change their minds about covering of our citizens who fall into the health insurance gap. South Carolina continues to reject the approximately $4.7 million a day being offered by the federal government to close this coverage gap even though other “red” states have accepted their funding or are in the process of developing programs to accept the federal dollars. Unfortunately, “We can’t afford it” is still the mantra of our state’s opposition.

Now this position of the opposition has been proven wrong.

The Robert Wood Johnson Foundation, a 40-year old highly respected organization, has released a report documenting exactly what the fiscal impact has been on states that took the path of accepting the federal dollars to provide health insurance to their low income citizens.

According to the report, Arkansas and Kentucky have saved enough state dollars by expanding their Medicaid programs to completely pay for their eventual 10 percent match. The savings resulted from these Southern states replacing state dollars that were paying for “mental and behavioral health programs, public health programs, and inpatient health care services for prisoners” with the federal dollars. South Carolina has these exact same expenses that the federal healthcare dollars could cover.

There is even more good news. This report did not include all the additional revenue from the new jobs created from the federal money flowing into these states. Closing the health insurance coverage gap by accepting the federal dollars not only will not cost Arkansas and Kentucky any tax dollars; it clearly has been an economic boon to the states. South Carolina would have the same results with up to 44,000 new jobs projected to be created by accepting the federal dollars.

Our state can follow in the footsteps of Arkansas, Kentucky and seven other Republican-led states that have accepted the federal dollars to provide affordable health insurance to close their coverage gaps. Republican governors in Wyoming, Indiana, Tennessee and Utah are in the process of developing private option health plans to be paid by federal funds in order to close their coverage gaps.

Not only would we be improving the health of our low income citizens at no state taxpayer cost, we would be growing our economy creating new tax revenue that can be invested in education and infrastructure.

The South Carolina Legislature should not wait another year to make this easy, good business decision. Accept the federal healthcare money and close our coverage gap.

Frank Knapp is president, CEO and co-founder of the South Carolina Small Business Chamber of Commerce, which is a member of the Close the Gap SC coalition (www.closethegapsc.org).


Scroll to Top