March 21, 2013
Implementation of the Affordable Care Act and in particular its Medicaid extension option is a snake pit of details that could ultimately transform labor and health care in this country.
It could be that the likes of state Sen. Larry Martin and the state’s business leaders will serve as the Indiana Jones of this story.
Surely the implementation of Affordable Care is changing the way businesses hire low-wage workers. For example, restaurants are limiting staff to part-time status to avoid health care demand in the act. We have yet to see where this pattern will lead. Will it mean less work for all or simply more part-time work for all?
The central theme in the General Assembly is how to deal with how to handle the extension of Medicaid benefits in South Carolina.
We have the option to accept $4.1 billion to help fund the expansion over the next three years or not.
The federal dollars come at the state’s cost of administering the funds as it would for existing Medicaid recipients. No one is saying how much the cost of administration is, but that cost is not the objection opponents raise.
The greatest concern is what the ultimate price tag will be when Medicaid starts serving more people in need. The number of people who emerge ranges from 250,000 in some estimates to twice that from other sources. In 2017, South Carolina would begin paying something toward the Medicaid expansion bill. That amount would be phased in until 2020. It would ultimately be 10 percent.
We have the option to avoid getting involved in the process.
The problem is that if we do opt out, we leave $4.1 billion lying on the table.
While it might be considered by some that the safe option is to not become entangled in more government expense, we are actually already involved in paying healthcare bills for the same people the Medicaid Expansion tries to address.
Company health care plans and individuals who can pay for their insurance and health care pick up the cost not paid by the would-be Medicaid recipients. It is called cost shifting and it has been going on for decades.
To operate, hospitals must get paid by someone, so those bills that aren’t paid by the user are added to the costs of hospital operation that, later down the road, are paid by those with resources. Running the expense through the Medicaid system spreads the cost out so more people are paying.
If we turn down the federal money, the cost will still be there. It will just be paid by companies and individuals with insurance.
Our thoughtful State Sen. Larry Martin has been puzzling over this question in relation to what other states are doing. If Florida accepts the money — which it has said it will do for three years — some cost shifting pressure is relieved from companies doing business in Florida.
If South Carolina does not take the money, companies could find themselves in a position of paying more to do business in the Palmetto State because they get a greater share of the cost shift. That seems bad for business recruitment and retention.
ObamaCare is what it is. Our initial instinct is that we’d should take $4.1 billion and run.
Martin counsels differently. He urges the business community and the state’s excellent business schools to weigh in – speak up and help direct our climb out of the snake pit.