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More than $1 billion in uninsured cost passed on
By Scott Miller
Staff Writer
South Carolina has one of the highest uninsured rates in the country, despite middle-of-the-road state funding for health care, and everyone is paying for it with higher health care and health insurance costs.
Last year alone, Palmetto State hospitals provided more than $500 million in “charity care,” according to the figures from the South Carolina Hospital Association.
Hospitals paid another $632 million to cover unreimbursed costs of government programs like Medicare and Medicaid.
So the total tab is more than $1.1 billion, passed on to paying health care consumers.
“The hospitals are paying for it because these people have nowhere else to go,” said Patti Smoake, vice president of the association. “Those of us who are funding our hospital bills are paying for it.”
So the association teamed up with health insurers and businesses to lobby for state-funded tax incentives to make health care more accessible and more affordable.
The so-called Covering Carolina Collaborative is pricey, though. The plan would cost the state at least $230 million annually. The collaborative suggests raising the state’s cigarette tax 90 cents per pack.
That idea might irk Gov. Mark Sanford, however, as might the group’s suggested expansion of an insurance program the governor is trying to trim in this year’s tight budget.
“Some of the proposals to raise the cigarette tax for various health care programs would at best be another instance of government picking winners and losers in the private marketplace, and at worst a $245 million tax increase,” Sanford said, expressing his hesitance to raise taxes without cutting taxes elsewhere.
He does want to raise the cigarette tax, but only to cover lost revenues from his proposed income tax cut. The Covering Carolina Collaborative requires new tax revenues. Sanford only supports “revenue neutral” tax swaps.
“We saw (the cigarette tax) as the only option possible,” said Robbie Kerr, executive director of the collaborative.
And the state faces a problem.
The numbers
About 17 % of the state population, or around 700,000 people, have no insurance. That’s seventh highest in the nation, according to information compiled by the Henry J. Kaiser Family Foundation.
South Carolina, meanwhile, ranked 32nd in the nation for health care funding, spending comparable amounts to states of similar size, according to the foundation’s data, which was taken from U.S. Department of Health and Human Services, among other places. The state spent $5.5 billion in fiscal year 2003, according to the most recent ranking from the foundation.
The Palmetto State ranked low in Medicaid payments, however. The state spent the least amount per enrollee, $5,000, on the elderly, for example. South Carolina also ranked low in Medicaid spending on adults and the disabled, two demographics where the collaborative has asked the state to boost funding.
For consumers, meanwhile, health care costs are growing at a fast clip. Prices increase an average 6.5% a year in South Carolina, the eighth highest rate in the country. South Carolinians pay an average of $5,114 a year on health care.
The collaborative aims to level out the rising cost of insurance, not necessarily lower it. Its plan is to insure more people through government programs and provide state-funded incentives to allow individuals to purchase insurance.
Covering Carolina
The group consists of the S.C. Hospital Association, S.C. Medical Association, S.C. Chamber of Commerce and S.C. Alliance of Health Plans. The goal is to support a competitive marketplace with financial incentives.
Here are the proposals from the Covering Carolina Collaborative, along with cost and participation estimates:
• Extend Medicaid coverage to all parents of low-income families living below 100% of the federal poverty level. Medicaid generally doesn’t cover parents beyond 50% of poverty. In other words, single parents earning more than $7,000 annually aren’t eligible.
This measure would bring health care to an estimated 80,000 adults, at an annual cost to the state of $60 million, according to the collaborative.
“Funding Medicaid by increasing the cigarette tax would only prolong the life of the Medicaid program temporarily, meaning more tax increases down the road to sustain growth in the program,” Sanford said.
• Provide tax credits to individuals and small businesses for people living between 100% and 250% of the federal poverty level who are not eligible for Medicare or Medicaid.
About 60% of businesses with fewer than 50 employees do not provide health coverage. A sliding-scale credit based on income and premium cost could encourage the uninsured to purchase insurance on their own. Small businesses that do provide coverage could claim the credit to offset the premium for qualifying employees. For $125 million, the state could give $2,500 tax credits to 50,000 people, the collaborative stated.
• Extend coverage to more children under the State Children’s Health Insurance Program, the same program Sanford is trying to trim in this year’s budget. The state expanded the program last year at a cost of about $22 million. Sanford wants that cut. But the collaborative wants to extend this coverage to 30,000 children for $45 million.
“Ultimately our goal is to level (the rising cost) of premiums,” Kerr said.
Providing early treatment to the uninsured, who often neglect care until their condition requires emergency attention and becomes more dire and expensive to treat, can help that happen, he said.
“What we are trying to do is help those people who are showing up for the wrong care, at the wrong time and the wrong place,” Kerr said.
Scott Miller is a staff writer at the Business Journal. E-mail him at smiller@scbiznews.com.
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