The Palmetto Insider

The blog of the South Carolina Policy Council

Medicaid Reform In Washington – More Costs than Savings

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Last week, the Policy Council released a report on how federal health care proposals would negatively impact Medicaid – in particular, by increasing state spending and reducing the quality of care.

In addition to that research, Sen. Jim DeMint’s office has provided us with a number of tables and charts detailing how the Senate’s version of health care reform (the “Baucus Bill”) would affect the states, including South Carolina.

Some aspects of the reform will save states money. But the costs outweigh the benefits. When the bill is examined as a whole, South Carolina will have a net increase in spending.

The charts and tables below detail the impact of the Senate plan on the 8 following areas:

1) Enrollment – How many additional Medicaid enrollees we can expect from a shift to 133 percent of the federal poverty line.

2) State Costs – Outlines the increase in state spending if the “Baucus Bill” is passed.

3) FMAP – This is the established match rate that federal government pays to states for Medicaid costs. The percentage will jump from 70.1 percent to 95 percent for South Carolina by 2014.

4) Federal Cost – Outlines the change in federal spending from the “Baucus Bill.”

5) Optional Coverage – Estimates reduction in Medicaid costs from optional coverage for populations above 133 percent of poverty line.

6) 3 and 10 Year Summaries – Shows Medicaid savings from 2010-2012, but massive increases from 2013-2019 with Medicaid expansion.

7) SCHIP – Increase in costs from predicted baseline for the SCHIP program.

8) Drug Rebates – State savings from Medicaid Drug Policies in the Health Reform.

The central theme of this data is clear – government health care reform in its current form will increase costs for South Carolina taxpayers. Thus these so-called reforms will inevitably lead to either an increase in taxes or a decrease in existing services – and most likely, both.

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Written by Geoff Pallay

November 3, 2009 at 8:00 am

Posted in Healthcare, Insurance, Uncategorized

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