Two-thirds of Medicaid recipients live in working families, but their incomes are too low to afford insurance. Eligible families stay on Medicaid an average of only two years. For every dollar South Carolina invests in the Medicaid program, the federal government matches it with three dollars. Cutting state Medicaid funding does not reduce the medical needs of the poor. It simply increases the burden to insured South Carolinians who pay higher premiums and medical bills to make up the difference.

Issue Overview

The Medicaid program is designed so that wealthier states help support the Medicaid programs of poorer states, such as South Carolina. For every dollar South Carolina invests in the Medicaid program, the federal government matches it with three dollars. No other investment available to the state guarantees that rate of return. Cutting South Carolina’s Medicaid funding does nothing to reduce the health care needs of our citizens. It just removes the smartest way to pay for the care they receive. The alternative is for South Carolinians to pay higher hospital charges and insurance premiums to replace the funds the state has given up.

Because it brings new money into South Carolina, Medicaid is a powerful economic driver for our state. According to researchers at the University of South Carolina’s Darla Moore School of Business, in 2002 the total economic impact of the Medicaid program on South Carolina was $2.1billion dollars, supporting 61,000 jobs and $1.5 billion in income for state citizens. Each $1million invested in Medicaid results in $1.7 million in new income and nearly 70 new jobs These are not just jobs in health care but also jobs in other businesses that sell goods and services to health care providers and to the people employed in health care.

No other investment opportunity guarantees a 3-to-1 return, attracts new money into the state, and takes care of low income families, disabled and elderly in South Carolina. Medicaid is a smart investment in South Carolina.