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SCHA: Medicaid Is Our Only Decent Option

From our friends at the South Carolina Hospital Association:

By Thornton Kirby for The State

One of the common refrains of this campaign season was “They just don’t get it.” This was generally used by Republicans to refer to Democrats who were thought to be out of touch with mainstream America, outraged by their overreaching with stimulus, bailouts and health care. If the Democrats don’t “get it” after their recent trouncing, they need to have their heads examined. But before everyday Republicans split their sides laughing at the hapless Democrats, they’d better ask themselves if they get it: Do they understand what the newly elected Republicans believe they have been charged to do?

I recently had a conservative hospital trustee ask me: “You don’t think Nikki Haley will try to cut Medicaid, do you? South Carolina would be crazy to give up the three-to-one federal match.” My answer: “I think that’s exactly what she intends to do. Reducing government was her primary campaign platform.”

There aren’t many options for slashing spending at the federal level apart from Social Security, Medicare and Medicaid, which account for roughly 40 percent of the federal budget. And even if Congress somehow avoids that, it’s hard to see how South Carolina will be able to balance its budget without cutting Medicaid, which is second only to public education in total state spending.

Republicans are acutely aware that they will not be re-elected in 2012 if they don’t impose fiscal discipline, and it won’t always be pretty. On Nov. 6, The New York Times contained an eyebrow-raising report from Texas: Some Republican lawmakers propose to solve the state’s $25 billion budget shortfall by dropping out of the federal Medicaid program. As a veteran lawmaker explained: “With Obamacare mandates coming down, we have a situation where we cannot reduce benefits or change eligibility” to cut costs. “This system is bankrupting our state. We need to get out of it. And with the budget shortfall we’re anticipating, we may have to act this year.”

South Carolina receives three federal dollars for every one state dollar we invest in Medicaid. Said another way, state taxes have to cover only one-fourth of the cost of caring for people who qualify for Medicaid. That’s not just a good deal, it’s a great deal. The trouble is that we still have to find enough money to pay 25 percent of the bill, and the bill gets higher every year. Just last week, we learned that the state Medicaid program could run a $228 million deficit this year, or else run out of money in March. Our elected officials are rightly concerned about this, since taxpayers don’t want to pay higher taxes to foot the ever-increasing Medicaid bill.

As we grapple with budget challenges, we surely will debate how much the state should spend on Medicaid. But we shouldn’t fool ourselves into thinking that spending less on Medicaid will reduce the total burden of indigent care in our state. That burden will continue to grow unless we adopt healthier lifestyles and reduce the level of heart disease and diabetes in our population. Until that happens, we will continue to share the cost of caring for poor people in our state.

South Carolinians are patriotic, independent and proud of their heritage. In my experience, they are also compassionate. I have not yet met a citizen of this state who wants to deny health care to persons who really need it. So where does that leave us? We expect our doctors and hospitals to provide care to everyone who truly needs it, and we expect them to figure out how to get paid. Since 1965, we have been all too glad to let the other 49 states pay 75 percent of the cost of this care through Medicaid.

Going forward, we have three options. The first option is to continue using Medicaid to get a 75 percent discount on the cost of caring for our low-income citizens.

The second is to provide care to our low-income citizens without the help of Medicaid. This means our hospitals and physicians will charge more to the insured patients who can pay, and the cost of insurance will go up even faster.

The third option is to tell everyone in South Carolina that they cannot have health care unless they can pay for it.

Ignoring federal laws that make it impossible for all practical purposes, the third option is long on personal accountability but short on compassion. For that reason alone, I don’t think South Carolinians will accept it. The second option makes no financial sense, and it should be discarded. That leaves Medicaid. Until we can bring ourselves to deny medically necessary services or pay the entire bill without any help from the other states, it’s still our best option.

Mr. Kirby is president and CEO of the S.C. Hospital Association.