Medicaid

Medicaid is the nation’s health coverage program for many low-income Americans. It helps pay for health and long-term care services for almost 900,000 South Carolinians, including very poor families, people with disabilities, and low-income elderly citizens.

South Carolina has seen a dramatic reduction in state revenues over the past two fiscal years. The total impact of this reduction on Medicaid has been offset by the increased federal contribution through the various stimulus bills. These “extra” funds will not be available beginning in July 2011, leaving the state legislature with approximately $800 million less revenue for next year’s state budget.

As states face budget shortfalls, some Governors have requested a relaxation of the Medicaid maintenance of effort (MOE) requirement that was part of the ACA. This change would push many low-income South Carolinians off the Medicaid rolls, thereby increasing the number of uninsured. SCHA and AHA support the MOE requirement and oppose efforts that shift the burden of care from states and the federal government onto our state’s hospitals.

Additional proposals to reduce Medicaid funding include the following.

• A Cap on Provider Taxes: President Obama’s recently released FY2012 budget proposal includes a provision that would call for a phase down of the Medicaid provider tax as one of the sources to pay for the physician payment fix. The proposal would lower the cap, starting a phase-in process in 2015 from 6 percent, to 3.5 percent in 2017 and beyond.

• Elimination of the Provider Tax: The National Commission on Fiscal Responsibility and Reform produced a report on how to bring the federal budget into balance in 2015 and to improve the long-term fiscal outlook. Included among the Commission’s health care savings options was restricting the federal match for state Medicaid provider taxes.

• Provider Rate Cuts: SCDHHS Director, Tony Keck, submitted an FY2011-2012 agency budget to include a $125 million reduction in provider rates. Hospitals are bracing for a rate cut of 10-11% July 1 which includes a 3% rate cut being implemented in early April. These changes to provider taxes and rates would have a significant impact on Medicaid financing and would adversely impact providers and beneficiaries alike. The solution to Medicaid’s problems is not drastic rate cuts. Hospitals in South Carolina are working diligently with the Medicaid agency and legislative leaders on solutions to make Medicaid a more efficient and sustainable program.

Comment Letters

September 2011

9/23- Letter to Governor Haley regarding Disproportionate Share Cuts

August 2011

8/29 - Letter to DHHS Director Tony Keck in response to DHHS Proposal on DSH