All things factored in, South Carolina could see as much as $4 billion in additional annual revenue over the next three years, as a result of expanding access to Medicaid.
That’s according to a report released Thursday by George Washington University and Cover SC, a Columbia-based nonprofit focusing on healthcare access, regarding the potential economic impact of Medicaid expansion in the state.
The report projects that were South Carolina to expand Medicaid under the Affordable Care Act in 2025, it would likely see several economic benefits:
· 360,000 people statewide would gain full Medicaid coverage in 2026.
· The state would receive $2.5 billion in federal Medicaid matching funds in 2026, plus $435 million in temporary federal bonus payments awarded under the American Rescue Plan, which would last for two years.
· Employment would grow by about 28,000 in 2026, of which 18,000 jobs would be in the health sector, which would lead to $4 billion in additional revenue for the state.
· An economic boon to counties between roughly $90 million and $200 million, on average, per year, through 2028.
The report was anticipated as a guide for a state legislative committee that was to be tasked with looking into addressing issues with South Carolina’s healthcare system. Two weeks ago, Gov. Henry McMaster nixed the proposed committee, rendering Cover SC’s report somewhat academic, at least for the rest of this year. The agency’s hope is that lawmakers can build from the information in the report in next year’s State Legislature session and remove South Carolina from a short – and dwindling – list of states that have yet to expand Medicaid access. South Carolina is one of 10 such states.
Resistance to expansion has been largely philosophical, if not overtly political. Deep blue and deep red states alike have already expanded Medicaid access, and the economic benefits those states have received were the heart of GWU/Cover SC projections for what could be in South Carolina.
“Back when the ACA first passed (in 2010) and states had the ability to expand Medicaid, only about 25 states expanded Medicaid,” said Leighton Ku, director of the Center for Health Policy Research at George Washington University, during a press call Thursday. “Since then, another … 15 have expanded Medicaid. The majority of them are actually states with Republican governors or strong Republican legislatures. What happened over time is, people realized A, this is a good deal; B, this is something that has broad benefits.”
Gov. McMaster has said that Medicaid expansion would yield financial benefits to the state at first, but then put South Carolina on the hook to pay for expanded healthcare services. He’s also said that “the better way” is to create more jobs that can help lift workers up.
Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce said in a phone interview Thursday that this kind of thinking is a misguided.
“It’s a fallacy to say, ‘Oh, just get a job,’” Knapp said. Because “only 21 percent of small businesses offer healthcare insurance.”
Add to that the fact that not all workers offered insurance from a job can afford to take it because of their lower wages. And, according to the Center for Budget and Policy Priorities, a progressive thinktank based in Washington, D.C., two-thirds of families that fall into the Medicaid coverage gap – too poor to pay for their own health insurance and too rich to qualify for Medicaid coverage – have at least one working family member already.
CBPP estimates that Medicaid expansion in South Carolina would move 83,000 adults out of the coverage gap.
Eleven percent of non-elderly South Carolinians were uninsured in 2022, according to the Kaiser Family Foundation. The national average is 9.6 percent. All states that have not expanded Medicaid access have uninsured rates above the national average.
