Charleston Metro Chamber announces support for responsible Medicaid expansion

The chamber supports expansion

The Charleston Metro Chamber of Commerce recently announced its support of responsible Medicaid expansion in South Carolina. The position is consistent with our Chamber’s Guiding Principles and Legislative Agenda which work to reduce healthcare costs for business and support legislation that will help the region attract and expand business, industry and jobs.

One of the provisions of the 2010 Patient Protection and Affordable Care Act (ACA) is to expand Medicaid eligibility to include those living up to 138 percent of the Federal Poverty Level (FPL), beginning in 2014.  In order to pay for additional enrollees in Medicaid, the ACA stipulates that states opting for expansion will receive federal funding to pay for 100 percent of the costs for those who qualify under the expansion for the first three years (2014-2016).  After that, states will receive a match of 95 percent in 2017 and gradually drop to 90 percent in 2020 and beyond and the states pay the remaining 10 percent. 

If the state does not accept the Medicaid expansion federal dollars, hospitals across the state will have severe cuts in federal reimbursement with no increase in funding for uninsured patients.  It is expected many hospitals, who already survive on thin margins, will not be able to absorb the additional cuts.  In the Charleston region, the impact to the major medical facilities will be in the hundreds of millions of dollars.

According to the University of South Carolina Economic Impact study, the total amount our state would receive in federal funding from 2014 to 2020 if South Carolina decides to expand Medicaid is $11.7 billion.  By 2020, these federal dollars will have a positive economic impact of nearly 44,000 jobs, and approximately $1.5 billion in labor income. This will translate into additional spending, leading to increases in S.C. General Funds totaling $105.6 million by 2020.  After 2020, the USC Study estimates the tax revenue generated by the federal dollars will cover about half the state’s match.

Currently the cost of uninsured South Carolinians is borne by employers, hospitals systems, and all of our region’s citizens in the form of higher health insurance costs. Responsible Medicaid coverage presents a real opportunity to bend the healthcare cost curve by moving individuals into appropriate, lower-cost settings.”

Multiple studies have shown that uninsured patients too often utilize expensive emergency department settings as their primary access point for healthcare. These individuals often delay seeking treatment until their health has significantly deteriorated, leading to much higher healthcare costs.

“There are two options. South Carolina can accept the Medicaid expansion and receive 90 percent of costs from the federal government or reject the plan and absorb 100 percent of the costs and lose revenue from Washington, D.C,  When we looked at the cost benefit of accepting versus rejecting these federal dollars and the added benefit of providing thousands of South Carolinians with better healthcare, our Board of Directors unanimously made the decision to support expansion,” said Bryan Derreberry, Chamber president and CEO.

“While the proposed allocations from the legislature are a good start to addressing other important health issues in our state, they are not intended as an alternative to Medicaid expansion. The extra funding to rural hospitals, telemedicine, and provider loan forgiveness are all intended to support getting more medical expertise to our traditionally underserved communities. This is absolutely critical towards designing a more effective health care delivery model in our state. Medicaid expansion is intended to address a different, but related issue; it is intended to improve access to health care for the almost one-in-five adults in our state who do not have medical insurance. Having insurance is key to getting routine medical care, and it must also be paired with making sure that there are enough health care providers who are accessible to serve the needs of this newly insured population, “said Ray Greenberg, MD, PhD, MUSC president.

“The action taken by the Charleston Metro Chamber of Commerce to support Medicaid Expansion in South Carolina should be looked upon as a model for other public entities in the state to follow,” said David Dunlap, president and CEO, Roper St. Francis Healthcare. “The expansion of Medicaid will serve as a lifeline for the poor and uninsured in our state to help them break the patterns that position South Carolina as one of the unfortunate leaders in the nation for the worst general health.”

“It is our responsibility to care for the entire community. Providing insurance coverage will ensure that everyone has access to the health care they deserve,” said Todd Gallati, president & CEO of Trident Health.

“Without the expansion of Medicaid eligibility, South Carolinians and their employers will continue to bear the entire cost of caring for those citizens between 100 percent and 138 percent of the Federal Poverty Level. While the proposed federal funding is certainly not a solution for our country’s health care delivery system, it will ensure that this critically underserved portion of our community is able to more pro-actively access care,” said Jason Alexander, CEO for East Cooper Medical Center.

About the Chamber: With more than1,875 members, the Charleston Metro Chamber of Commerce serves as the catalyst for advancing our region's economy, improving our quality of life and enhancing our members' success.