COLUMBIA, S.C. (AP) — Gov. Nikki Haley on Thursday touted her Medicaid agency's plan to fully reimburse rural hospitals for treating people without health insurance, as a way to stabilize rural hospitals that struggle to stay open.
Haley and director Tony Keck said the policy focuses support on hot spots of poor health.
"For too long, the money hasn't followed the problem," said Keck, director of the state Department of Health and Human Services.
South Carolina has distributed a $461 million federal Medicaid fund for uncompensated care to hospitals equally, covering nearly 60 percent of their costs for uninsured patients. Starting in October, 18 small, rural hospitals will be reimbursed 100 percent. That would expand to 19 if the Bamberg hospital reopens. The policy will shift about $20 million annually to hospitals that have a much higher share of patients who can't pay and are much sicker, Keck said.
"If we lift these areas up, we lift up all areas of South Carolina," the Republican governor said.
Haley and Keck insisted the decision was unrelated to the debate over whether to expand the federal-state health insurance program to cover tens of thousands of uninsured people under the federal law known as Obamacare — something the Republican governor refuses to let happen.
"It's about doing the right thing," Keck said.
But Democratic state Rep. James Smith called it a distraction to the bigger issue of increasing poor people's access to primary health care that helps people avoid expensive emergency room visits.
"Providing more ER care is what we want to get away from," Smith, D-Columbia, said at a news conference held moments after and feet away from Haley's. "This is not going to fix health care in South Carolina."
Smith said the policy pits urban hospitals against rural ones. He called it wrong to take urban hospitals' money.
Keck agreed the policy alone won't make people healthier, calling it one of many initiatives. And he contends the non-rural hospitals will end up receiving higher reimbursements too.
Even without expanding who's eligible for Medicaid, the state expects 160,000 additional already-eligible people to enroll rather than face fines under the federal health care law. Others who get a federal subsidy to help them afford private health care will further decrease the number of people showing up uninsured in emergency rooms, Keck said.
Yet, the $461 million fund won't shrink for several years, he said.
"By then, the number of uninsured is greatly reduced," he said, acknowledging that the law's impact is uncertain.
Troy Campbell of Williamsburg Regional said the new policy will help his hospital stay open, hopefully providing the money to make up its typical annual shortfall of $1 million. He said the hospital came close to closing earlier this year, but stayed open after employees agreed to take a 10 percent pay cut.
"We struggle just to make ends meet," Campbell said. "We think it's a great idea. It's outside the box."
Dr. John Hicks, a cardiologist at Clarendon Memorial, took issue with the notion that Haley was throwing a bone to rural hospitals that are advocating for the Medicaid expansion.
"It's not throwing a bone. It's throwing a lifeline," he said.
Haley first announced the policy change in her State of the State address last month. Her news conference to tout the change came two days after Democratic legislators accused Haley of disregarding rural areas and the poor.
Advocates for expanding Medicaid told a Senate panel earlier Thursday that if legislators do not act, more than 300,000 poor South Carolinians will be left without health care coverage.
Groups representing the poor, mentally ill, disabled and retired residents told senators it's about providing access to health care that enables them to work and be active. The panel did not debate the issue or take any action. No legislation yet exists.
The U.S. Supreme Court decision that upheld the federal law made the expansion an option for states, rather than mandatory. Not expanding it creates a "doughnut hole" of people left fending for themselves, between those who are poor enough to qualify for Medicaid and those who can get subsidies, said Sue Berkowitz of Appleseed Legal Justice Center.
In South Carolina, parents qualify for Medicaid if their take-home pay is up to 50 percent of federal poverty guidelines. The expansion would increase coverage to 138 percent and include childless adults. The new income limit would be roughly $15,400 for an individual and $30,650 for a family of four.
The federal government would pay 100 percent of medical expenses for newly qualified enrollees from 2014 to 2017, then the federal share would be reduced to 90 percent by 2020, with each state paying the balance.
Haley opposes the expansion, saying the state cannot afford the eventual 10 percent match the state would be required to pay.