Fast Facts on S.C. Medicaid

As politicians in D.C. continue to look for ways to expand taxpayer funded health coverage, it is a good time to begin to look at how well the current system of government provided health care is working. Setting aside the incredible regulatory burden the private health care system operates under, government provided health care essentially consists of Medicaid and Medicare. Current proposals for a nationalized health care system would implement a public health insurance option for individuals not eligible for either program.

Medicaid is a national health insurance system funded jointly by the federal government and the states whereas Medicare is a strictly federal program for the elderly and disabled. Here, we want to look at Medicaid, which currently makes up 19 percent of the state budget and is expected to consume 29 percent of the budget within 10 years.

• South Carolina’s Medicaid program cost $4.5 billion in FY2008. State taxpayers were responsible for 29.93 percent of these costs while federal taxpayers paid the remaining 70.07 percent
• Over the last 20 years, state spending nationwide on Medicaid has increased 10 percent a year
• There is wide agreement among experts, including the federal agency that runs Medicaid/Medicare, that “the current spending path of Medicaid is unsustainable"
• One out of every five South Carolinians is on Medicaid
• More than half of all S.C. births – 54 percent – in 2008 were paid for by Medicaid
• Medicaid enrollment has roughly doubled over the past 15 years, hitting 903,397 for FY2008
• Medicaid eligibility limits range from 100 percent of the Federal Poverty Limit (FPL) for the aged/blind/disabled to 250 percent FPL for the working disabled. Low-income beneficiaries may earn no more than 135 percent of FPL
• Approximately one-third of all children in South Carolina are covered by either Medicaid or the State Children’s Health Insurance Program (SCHIP). SCHIP eligibility is 150 percent while the newly implemented Healthy Connections Kids program caps out at 200 percent FPL – or $44,100 for a family of four
• While 55 percent of S.C. Medicaid eligibles are children, two-thirds of spending is for the elderly and disabled (23 percent of enrollees)
• Hospital expenditures constitute the most expensive component of Medicaid and remain high because enrollees tend to rely on emergency room care instead of a primary care physician
• Medicaid includes a range of mandatory services every state must offer. Beyond that, states are free to offer optional services. Some of the optional services South Carolina provides are: prescription drug coverage; chiropractic care; community long-term care (e.g., in-home nursing care); and physical therapy. Nationwide, approximately 70 percent of Medicaid spending is for optional services
• Medicaid fraud collections for overpayments and inappropriate use increased by 62 percent between FY2007 and FY2008
• South Carolina attempted a major Medicaid overhaul in 2005, but the reform was essentially blocked by federal regulators, who narrowed the reform proposal from a statewide plan to a single county pilot program (referred to as “Health Opportunity Accounts”) limited to 1,000 participants

Nothing in the foregoing should be construed as an attempt to aid or hinder passage of any legislation. Copyright 2009. South Carolina Policy Council Education Foundation, 1323 Pendleton Street, Columbia, South Carolina 29201. Follow the Policy Council on Facebook at www.facebook.com/scpolicycouncil or Twitter at www.twitter.com/scpolicycouncil.