Thursday, February 21, 2013
By Rob Colones
President, McLeod Health
I read with interest a recent column by S.C. State Representative Alan Clemmons, whose District includes a portion of the area served by McLeod Health. His column laid out his opposition to accepting $11.2 billion in federal tax dollars under the Affordable Care Act that would broaden health coverage for uninsured in South Carolina earning up to $15,856 a year.
I respect Representative Clemmons and can understand his ideological view. Yet, we may agree to disagree on this issue. I would like to present some additional thoughts to consider.
First, some background. According to the Kaiser Family Foundation, our state has approximately 700,000 people without health insurance. Many of the uninsured are from working families. Unfortunately, many are in jobs that do not offer health coverage or don't pay enough for the person to buy it. In some cases, individuals survive on several part-time jobs — some of which do not offer benefits. Part of the high cost of health care relates to cost shifting to cover the uninsured.
Under the Affordable Care Act, South Carolina would receive funds to cover 100% of the cost of coverage for people with incomes under 138% of the federal poverty level from 2014 to 2016. From 2017 to 2020 the support would decline slightly each year but settle at 90% of the cost. Overall, the federal tax dollars would amount to $11.2 billion through 2020. These are essentially tax dollars South Carolinians already sent to the federal government, finding their way back home.
If South Carolina does not accept the funds, these dollars will likely go to other states to help expand their health coverage to low-income families. It would not go back to the federal treasury to help the deficit. It could not be used to build highways. And the state cannot create conditions for accepting the money — such as changing eligibility. The choice is — either South Carolina accepts the Affordable Care Act money or not.
Additionally, a study by the Moore Business School at the University of South Carolina says that the funds will not only offer health coverage to more than half of those now without insurance, but would also create 44,000 jobs, boosting the state's economy. The economic study also projects that the additional jobs will generate sufficient taxes and revenues to make up whatever additional costs the state coffers might face to pay for administration of the additional health coverage recipients.
It may be helpful to remember some of the thoughts of Rep. Clemmons on this and related issues to see how they may affect the discussion on accepting the federal funds for covering the uninsured.
"In today's economy, every viable opportunity to create new jobs must be dutifully pursued."
— SC Rep. Alan Clemmons, R, Myrtle Beach (Op-Ed Myrtle Beach Online, 8/4/12)
We can certainly agree with that. And we agree with Rep. Clemmons as he talked about the advantages of using federal and state funds to build I-73. Rep. Clemmons is chairman of the National I-73/I-74/I-75 Corridor Association, in favor of the construction of an Interstate to Myrtle Beach.
"I support it. Will bring 22,347 jobs for SC."
— Alan Clemmons, Twitter post on I-73 project as reported on thenerve.org 5/24/11
Chuma Economics & Analytics created an economic impact study of the I-73 project cited by Rep. Clemmons. It predicts that expenditure of federal and state funds to build I-73 would create 23,000 jobs after 20 years.
According to the economic development study by the Moore School of Business on broadening Medicaid, bringing federal funds to South Carolina would create 44,000 jobs in a much shorter time than 20 years.
"I-73 will create jobs, improve our economy … and save lives. Are these not worthy goals? Opponents have yet to show a reasonable alternative plan to accomplish the
— SC Rep Alan Clemmons, Myrtle Beach Alternatives
Again, we agree with Rep. Clemmons. Applied to Medicaid, broadening Medicaid coverage to the working poor will create jobs, improve our economy and save lives. These are worthy goals.
Reasonable alternatives? The opponents to broadening health coverage for low-income uninsured "have yet to show a reasonable alternative plan to accomplish the same goals."
"Instead [of broadening health coverage], the federal government should be granting more states flexibility in managing their programs."
— SC Rep. Alan Clemmons, Column, Aiken Standard 2/5/13
Unfortunately the Affordable Care Act and the Supreme Court's ruling last year does not allow flexibility. Decisions and laws made in Washington allow South Carolina only one choice at this point in time - a) accept … or, b) reject the billions of dollars to provide some health coverage to low-income uninsured.
On the issue of that choice, I tend to agree with Stan Dorn, senior fellow at the Urban Institute Health Policy Center, when he says it is "very clear that [individuals] are much better off with Medicaid than [they] are without insurance."
There will be some administrative costs that the state must absorb, if the state accepts the federal funds.
"The Medicaid expansion would add over half a million new people to the Medicaid rolls in South Carolina — and up to $2 billion in additional costs — by 2020."
— SC Rep. Alan Clemmons, Column, Aiken Standard 2/5/13
While the exact number of new people added is an estimate, the economic feasibility study by the University of South Carolina says additional revenue and taxes created by 44,000 new jobs would offset these costs. Similar economic impact studies about Arkansas, Michigan, Maryland, Mississippi, Nebraska, Ohio, Oklahoma, Texas, and Tennessee have essentially reached the same conclusion as the Moore School of Business study.
Arizona's conservative Republican Jan Brewer chose to accept the Affordable Care Act funds noting that her state would be worse off if it turned down the federal dollars that will come with broadening Medicaid. GOP Rick Snyder of Michigan announced he would support expansion in his state, as have Susana Martinez of New Mexico, Brian Sandoval of Nevada, Rick Scott of Florida and Dennis Kasich in Ohio.
Why are these leaders swayed to accept the funds to broaden health coverage for low-income families in their states?
The Los Angeles Times reports (2/7/13) that "Republican governors who [choose to broaden health coverage under the Affordable Care Act] defend their decision in economic terms. Kasich said it would keep his state competitive with others in attracting jobs. Snyder and others have said it will save the state money by reducing the number of people who rely on emergency rooms for primary care.
Rep. Clemmons has promoted the construction of I-73 because there are matching federal funds to help. "When it comes to major roadway projects, such as I-73, it's standard for the federal government to provide between 70 and 80 percent funding,” said Nancy Singer, a public affairs specialist with the US Department of Transportation.
The Affordable Care Act funds would provide 100% of the cost of coverage through 2016, then dropping to 90% by 2020. Even at the lower level of matching, broadening health coverage is better match than 80% highway funding. In all respects, I think accepting the Affordable Care Act funds is a better plan for South Carolina than not accepting the funds.
After all. It's our state. Our money. Our health.
Rob Colones is president of McLeod Health, a health system serving people in northeastern South Carolina that includes five hospitals, 6,000 employees and 450 physicians who are medical staff members. You may find a copy of the USC Economic Impact Study at www.BetterPlanSC.org.
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