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.
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