South Carolina and the ACA’s Medicaid expansion

South Carolina has not expanded Medicaid, and is the first of the non-expansion states to receive federal approval for a Medicaid work requirement

south-carolina Medicaid guide

No Medicaid expansion in South Carolina

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South Carolina’s governor and legislature have strongly rejected Medicaid expansion under the Affordable Care Act (ACA). As a result, there are about 124,000 people in the state who are in the “coverage gap” with no realistic access to health insurance. They are the state’s poorest residents, with incomes under the poverty level. They do not qualify for subsidies in the exchange and they also do not qualify for Medicaid. In many cases, they rely on emergency rooms and community health clinics, but future funding for those clinics is in jeopardy too.

Since 2017, Republican Henry McMaster has been the governor of South Carolina (McMaster was the lieutenant governor and took office as the governor when Nikki Haley was appointed by President Trump to be the US Ambassador to the United Nations). McMaster is opposed to Medicaid expansion, as was Haley.

CMS approves Medicaid work requirement for low-income parents

The Trump administration has approved Medicaid work requirements in several states, although most have either been overturned by court rulings or pended by the states — none are in effect as of late 2019. And all of the Medicaid work requirement waivers that had been approved prior to December 2019 were for states that had expanded Medicaid.

[Medicaid expansion provides coverage for non-elderly adults who don’t fall into the existing eligibility categories (disabled, pregnant, very low-income parents), so the idea behind the work requirements in most states is that since Medicaid expansion applies mostly to able-bodied adults, they should have to work in order to maintain coverage. This logic is flawed in many ways, which have been covered extensively by consumer advocates, but it’s the stated premise behind the work requirements that were approved prior to December 2019.]

In December 2019, when CMS approved South Carolina’s Medicaid work requirement (“community engagement”) proposal, it was the first such approval for a state that hasn’t expanded Medicaid. Because South Carolina hasn’t expanded Medicaid, the state’s Medicaid population consists of low-income people who are children, elderly, disabled, pregnant, or parents of minor children. Adults who don’t fit into one of these categories are not eligible for coverage, no matter how low their income is.

So the state’s Medicaid work requirement will primarily apply to low-income parents of minor children. Under existing rules, these parents are eligible for Medicaid with income up to 67 percent of the poverty level (less than $1,200/month for a family of three). They are not currently subject to a work requirement, but that will change under the terms of the state’s new waiver.

A separate waiver has been approved that will grant Medicaid eligibility to South Carolina parents with income as high as 100 percent of the poverty level — but parents will have to comply with the state’s new Medicaid work requirement in order to have coverage. So although Medicaid eligibility for low-income parents in South Carolina is being expanded, the expansion comes with significant strings attached, and could eventually result in as many as 26,000 fewer low-income parents covered under South Carolina’s Medicaid program (the specifics of this are not addressed in the federal approval, as noted here by Georgetown University’s Joan Alker).

The second waiver also grants Medicaid eligibility to a “Targeted Adult” population, including those who are chronically homeless, involved with the justice system (as a defendant), or in need of substance use disorder (SUD) treatment. But as is the case for low-income parents, these individuals will have to comply with the work requirement unless they qualify for an exemption.

The state estimates that between those two populations (ie, parents with income that makes them newly-eligible for Medicaid, and the Targeted Adult group), 45,100 people will potentially gain eligibility for Medicaid. In and of itself, this would be excellent news. But the work requirements will add a layer of complexity that will result in some people losing coverage (including children, who may lose coverage if a parent is confused about the eligibility rules).

There are various exemptions built into the work requirement, including one for primary caregivers of minor children. This will exempt most single parents and two-parent households where one parent is disabled (although in two-parent households where neither parent is disabled, at least one parent will have to comply with the work requirement). But as Joan Alker notes, these exemptions will not be automatic. Enrollees will have to apply for the exemption, which creates another layer of complexity and confusion that will no doubt result in erroneous coverage losses.

In conjunction with the state’s waiver approval, Gov. McMaster issued an executive order that creates a task force dedicated to implementation of the work requirement, including coordination with the various state agencies that will be involved. South Carolina’s Medicaid work requirement proposal noted that the requirement would not be implemented before July 2020, and the state’s community engagement resource page notes that no time frames have been specified yet for compliance or reporting requirements (the state will update that page as they go through the implementation process). The state has also created an at-a-glance fact sheet about the new work requirement.

Medicaid in South Carolina

Medicaid became effective in South Carolina in July 1968, two and a half years after it was available in the first states that implemented it. Eligibility has been improved and expanded over the years through federal mandates that required coverage for children and pregnant women.

A primary provision of the ACA was to expand Medicaid to cover all legally-present residents with incomes up to 138 percent of poverty, with the federal government paying the full cost of expansion through 2016. After that, the states have gradually taken on a small portion of the cost, but it will never exceed ten percent. It was expected that this landmark expansion of Medicaid would be implemented in every state.

But in 2012, the Supreme Court ruled that states could not be penalized if they chose to not expand their Medicaid programs, and South Carolina is one of the 14 states that has not yet expanded Medicaid.

Former Governor Nikki Haley was staunch in her opposition to Medicaid expansion, although her comments on the issue seemed to indicate that her primary objective was opposing President Obama. In 2013, Haley stated that South Carolina “will not expand Medicaid on President Obama’s watch. We will not expand Medicaid ever.” And Gov. McMaster has maintained that approach. Unfortunately, this means that South Carolina residents are paying federal taxes that are being used to fund Medicaid expansion in other states — and they’re getting nothing for themselves. The state is missing out on $15.8 billion in federal funding over the next decade by not expanding Medicaid.

In addition to the financial impact, there’s a human cost to not expanding Medicaid. A White House report in June 2015 noted that expanding Medicaid in South Carolina would save 200 lives per year. Democrats in the state legislature renewed their calls to expand coverage in 2015, but no progress was made during the 2016 legislative session. That has continued to be the case in subsequent sessions, which is unsurprising given the strong Republican majority in the state’s legislature.

Although Medicaid coverage is still only available to a very limited number of adults in South Carolina, a small improvement came in December 2014 for adults who are covered by SC Medicaid. Preventive dental care, including cleanings, fillings, and extractions, was added to the existing Medicaid benefits, with up to $750 in annual benefits per member. Previously, this benefit was only provided for children.

Who is currently eligible?

The guidelines in South Carolina are mostly unchanged from 2013. But the state still saw a 17 percent increase in its Medicaid/CHIP enrollment between late 2013 and September 2019, thanks in large part to the publicity surrounding the ACA and outreach on the part of enrollment assisters.

Under the terms of a new waiver that was approved by CMS in late 2019, parents and caretakers of minor children are eligible for Medicaid in South Carolina with income as high as 100 percent of the poverty level, but only if they’re in compliance with the state’s new Medicaid work requirement (approved as part of a separate waiver), or eligible for an exemption from it.

Here are the current eligibility guidelines, which include a 5 percent income disregard (the state also has a resource that shows these limits in terms of monthly income):

  • Children with household incomes up to 213 percent of poverty.
  • Parents/caretakers with dependent children, if their household incomes do not exceed 100 percent of poverty (non-exempt enrollees in this category must be in compliance with the state’s new Medicaid work requirement).
  • Pregnant women with household incomes up to 199 percent of poverty.

No Medicaid coverage is available for non-disabled childless adults, regardless of how low their income is. This is the group most likely to fall into the Medicaid coverage gap and have little in the way of realistic options for health coverage. This problem would be remedied if South Carolina were to accept federal funding to expand Medicaid, but the state has thus far rejected that option.

How do I enroll?

Despite political leadership’s opposition to expanding Medicaid, the state has taken steps to overhaul its Medicaid enrollment process and is actively working to enroll people who are eligible based on the existing guidelines. There are additional employees in the state’s Medicaid call center, an online application process (in addition to HealthCare.gov) and the state is using databases of people who already qualify for other income-based programs like SNAP to help identify residents who are eligible for Medicaid.

  • South Carolina Healthy Connections Medicaid has a website where you can enroll online.  You can also reach them by phone at 1-888-549-0820.
  • You can enroll in Medicaid through HealthCare.gov
  • You can enroll over the phone via HealthCare.gov by calling 1-800-318-2596

Medicaid enrollment is available year-round.

How many people have enrolled?

Medicaid enrollment continues year-round, and South Carolina’s poverty rate is high (20 percent of adults and 30 percent of children). From the fall of 2013 through September 2019, the population covered by Medicaid in South Carolina grew by nearly 150,000 people — a 17 percent increase, despite no change in eligibility guidelines. Nationwide, enrollment in Medicaid has increased in most of the states that haven’t expanded Medicaid, due to increased awareness and outreach. People who were already eligible for Medicaid might not have known about their eligibility, but find out about it when they go to an enrollment center or reach out to the exchange to see about obtaining coverage.

How to apply in SC

Enroll online at South Carolina Healthy Connections Medicaid or by phone at 1-888-549-0820; or enroll in Medicaid through HealthCare.gov or by phone at 1-800-318-2596

Eligibility: The aged, blind, and disabled.  Also children with household incomes up to 208% of FPL; working parents with dependent children with household incomes up to  89% of FPL; jobless parents with dependent children with household incomes up to 50% of FPL; pregnant women with household incomes up to 194% of FPL.

South Carolina section