S.C. Health Care Panel Studies State’s Insurance Options

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Opponents of Health Care Reform Preach Free-Market Solutions While Obstructing A Free, Competitive Market for Health Insurance

Published: Friday, April 15, 2011

COLUMBIA — The future of health care reform in South Carolina might include insurance marketplaces as required by federal law, but this state can’t afford to limit itself to planning for that one scenario, Health and Human Services Director Tony Keck said Thursday.

Keck is one of 12 members on the South Carolina Health Exchange Planning Committee created this past month by Gov. Nikki Haley. The committee, which has removed the word “exchange” from its name, is funded by a $1 million grant from the federal government under the Patient Protection and Affordable Care Act — what conservatives typically call “ObamaCare.”

“We’ve got to be careful about asking the wrong question here,” Keck said. “The grant basically tells you what the questions should be. And that’s a directive from the federal government. But as we’ve had conversations with stakeholders, we want to ask a different question in South Carolina.”

Haley’s transition team was informed of the grant in November, but her office didn’t take action until legislation sponsored by state Rep. Harold Mitchell, D-Spartanburg, to create a state health insurance exchange made headway.

Mitchell has accused Haley of demonizing the word “exchange,” particularly in conversations with tea party supporters, making it impossible for this state to ever create such an entity.

An exchange is a marketplace that allows insurance companies to compete to offer coverage to uninsured people. The federal government will come into South Carolina and create an exchange for this state if certain benchmarks haven’t been met by Jan. 1, 2013. The exchange goes live a year later.

“It’s got to be a much broader conversation,” Keck said. “We’re going to use that grant money to the amount that’s appropriate … but we’re not going to draw on that grant money for lots of unnecessary things just to spend the money. So, if we have another set of questions that’s not related to health insurance exchanges, we will find folks who want to volunteer their expertise; we’ll take things we’ve already been working on. … The big question is, don’t limit ourselves to just thinking about exchanges. The goal is to make the private insurance market work better.”

The Department of Insurance hired Gary Thibault to serve as committee chairman. Thibault’s $102,000 salary is being paid out of the federal grant.

For the committee, the University of South Carolina Institute of Public Service and Policy Research will conduct a 2,000-home survey across the state to get a grasp on the number and characteristics of uninsured people in this state.

The school also will host focus groups to look at more specific areas — costs, benefits, health care providers — and interview individual key players who have a vested interest in the future of health care in this state.

Most people don’t understand the word “exchange,” institute Director Robert Oldendick said.

The committee also created task forces to study competitiveness and transparency, consumer-driven health plans, medical liability and IT infrastructure,

Findings must be reported to the governor and the General Assembly by Oct. 28. The grant expires in September. South Carolina might need to apply for a 90-day extension on that, said Andrew Dvorine, an associate actuary with the state Department of Insurance. He said the committee wasn’t limited to just looking at whether South Carolina would have a federal exchange or creating its own.

“There is a third option,” he said. “Governor Haley went up and spoke to President (Barack) Obama and said we want to opt-out, and he said, ‘You can. You can if you do this, that and the other.’ Well, if this committee decides after looking at all the information that we don’t want a state exchange — and, of course, we don’t want the federal government to do it — and we have a plan, I don’t think there’s anything wrong with us reporting that.”

Mitchell’s bill lost Republican support when various tea party activists began voicing opposition. Mitchell has since asked that his bill be killed so that whatever happens isn’t blamed on him, but he says his colleagues won’t touch it.

“We are way behind the eight ball of timing, of getting this thing up and going at the end of session,” Mitchell said. “We know we have a problem in this state with people who don’t have health care coverage. We’re playing Russian roulette with this time frame, not wanting to do anything until this is done.”

John Ruoff, program director for South Carolina Fair Share, called the phone survey methodology “hellacious.”

“There are real concerns about whether the governor, and this committee, will create a real competitive marketplace for consumers,” Ruoff said. “Talking about free-market solutions where there’s no free market is cloud cuckoo land.”

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