SC Health Care Reform: Assimilation or Innovation?

During the State of the State address Gov. Nikki Haley gave examples of the fiscal catastrophe of Obamacare and its burden on state budgets. Haley stated,

“Connecticut expanded early under ObamaCare and just reported a $190 million Medicaid deficit – in spite of subjecting their citizens to a massive tax increase. California just raised taxes in part to cover their Medicaid deficit and yet needs $350 million more to pay for ObamaCare next year. That’s not us. That’s not South Carolina. The federal government likes to wave around a nine dollar match like it is some silver bullet, some extraordinary benefit that we cannot pass up. But what good does the nine dollars do us when we can’t come up with the one? And what good are any dollars when they come through a program that doesn’t allow us the flexibility to make the decisions that are in the best interest of the people of South Carolina? In the end, I cannot support this expansion for a very simple reason: it avoids addressing our health system’s high costs and poor outcomes. As long as I am governor, South Carolina will not implement the public policy disaster that is ObamaCare’s Medicaid expansion. Instead, we need to improve health care value. And we will.”

Gov. Haley has made it clear that ObamaCare’s Medicaid expansion is out of the picture for SC. But what can the state do to reform current Medicaid to relieve the tax burden on working families while helping low income families move out of poverty? SC should adopt winning strategies used in other states to reform our healthcare and fiscal crisis.  

Today, the traditional Medicaid spending plan is open-ended and encourages states to spend as much as they can in order to gain additional federal money. This type of spending was creating massive budget deficits for Rhode Island. Instead of accepting the status quo, Rhode Island created an innovative waiver program from the federal government called the Global Consumer Choice Compact. This waiver gave Rhode Island Medicaid funds in the form of a block grant that caps unlimited federal funding which gave administrators clear budget guidelines to manage funds within cost containment mechanisms, and forced the state to produce high-quality programs for low income families. Rhode Island had the political fortitude to challenge the status quo and create plans to save $1.8 trillion dollars over 10 years.

Florida implemented its own reform programs for 5 counties and allowed Medicaid recipients to choose plans from different competitors which drove down prices and increased benefits. Florida started programs that gave recipients incentives to get healthy by offering $125 a year refundable tax credit for people that lose weight or quit smoking. The reformed counties also allowed the working poor to opt out of Medicaid completely to use allocated Medicare tax credits to buy private insurance. These types of reforms saved $118 million a year in the reformed counties. Florida plans to launch these programs state wide that will result in a projected savings of $1 billion. Studies show that if SC could adopt a Florida framework for Medicaid reform it could save approximately $400 – $900 million a year.

 Sadly, SC welfare programs have failed to help low income families get out of poverty. Recently a study from Pennsylvania Secretary of the Department of Public Welfare, Gary Alexander, showed that a single mom is better off making $29K a year and receiving welfare benefits than making $69K a year. These welfare programs do not help families, but trap families into a lifetime of government dependency.

SC must reform healthcare and entitlement programs to help families out of poverty and eliminate the tax burden on the middle class. SC should not assimilate or adopt Obamacare, but implement innovative reforms like Rhode Island and Florida. SC should implement waivers that cap federal Medicare spending, work to reduce fraud, give able bodied recipients work requirements, and require recipients to be held accountable for their own health choices. Currently, SC Medicaid recipients can only choose from a few plans, if SC would allow more competition to offer plans across state lines it can reduce costs and provide more benefits. SC should allow the working poor to opt out of Medicaid entirely, and give them a tax credit to purchase their own private insurance. All these government solutions should work to down size recipients relying on government programs, and work to eliminate generational government dependency.