FEATURE ‌ S.C. McMedicaid Plan 

Governor wants to overhaul how the state funds costly insurance plan

click to enlarge Gov. Mark Sanford (above) wants S.C. to privatize Medicaid, a move State Sen.  Brad Hutto thinks could strand vulnerable residents
  • Gov. Mark Sanford (above) wants S.C. to privatize Medicaid, a move State Sen. Brad Hutto thinks could strand vulnerable residents

Mark Sanford, who swears he's not running for president, is drawing national attention for his plan to overhaul how state-supported medical insurance is funded in South Carolina, which is quickly becoming a litmus test for how the entire nation may handle its Medicaid budget woes.

Medicaid is a government program run by the state but funded jointly by the state and federal government that provides low-income recipients with health insurance. The efforts to overhaul the current system are rooted in the immense cost it poses to the state. Currently, South Carolina spends about $1 billion a year, or about 14 percent of its total annual budget, on Medicaid, and S.C's Department of Health and Human Services projects that the figure will increase up to 30 percent over the next 10 years.

Sanford claims his plan will save the state $300 million over five years.

As one would expect, Republican leaders are endorsing Sanford's plan to introduce Medicaid to the free market here by providing beneficiaries with personal accounts to purchase private insurance.

According to the Associated Press, U.S. Sen. Tom Coburn (R-Okla.) has extolled what he calls "a bold plan," and former U.S. Speaker of the House Newt Gingrich also praised Sanford's plan, claiming, "I think we're right at the edge of figuring out how to fix health care."

Some opponents allege that Sanford is playing politics with Medicaid as a precursor to a presidential run. In essence, the plan could become a backdoor catalyst for changing the way the entire Medicaid system is funded. Because the federal government pays half the costs of Medicaid, it must formally OK Sanford's plan. Widespread Republican support for Sanford's plan could (wink wink) lead to widespread support for Sanford.

But not everyone in South Carolina is sold on the plan -- especially legislators sitting on the other side of the aisle.

"I'm not willing to experiment with the people of South Carolina," says state Sen. Brad Hutto (D-Orangeburg). "If it doesn't work out, there's no backup plan."

South Carolina's Department of Health and Human Services (DHHS) has been working with Sanford for the past year and a half on the details of the overhaul. Brian Kost, who works with the department's Medicaid Agency, fully endorses the plan and stresses that it will improve patient care. "We are very excited. We've never been able to give this kind of quality-based care before."

One of the key changes in Sanford's plan is that Medicaid recipients would be exposed to a private insurance system with which they might not have any previous experience. Kost, however, points out that the DHHS is working to instill numerous safeguards into the plan.

Available health plans will be pre-approved by the state only after certain assurances are given. For example, insurance companies will have to provide a number of mandatory services and prescription benefits for patients before a plan will be approved by the state for purchase by Medicaid recipients. "A lot of companies are already interested in working with us on this thing and have been calling to see how they can help," Kost affirms.

Furthermore, an enrollment counselor will be assigned to recipients when they qualify to help walk them through the process. "People will be able to look at competing plans and pick what works best for them," says Kost.

Under Sanford's plan:

•Recipients would be given a fixed amount of money each year to buy private insurance and pay out-of-pocket costs .

•Co-payments for in-patient hospital visits would rise from $25 to $40; co-payments for outpatient visits would rise from $3 to $10.

•Patients would not make a co-payment for an emergency room visit unless they show up with a non-emergency situation, for which they would be charged $20.

Due to the manner in which the current Medicaid system limits access to doctors, most patients end up receiving care in emergency rooms. Sanford and the DHHS hope that a shift toward managed care can eliminate the cost of frivolous emergency room visits. "Under the new plan, we can partner patients with a primary care physician who knows their history and can work with them on preventive care," Kost claims. "People will be healthier."

Still, not all are applauding Sanford's plan. Hutto argues that it will place an unfair burden on the poor. "What happens if something terrible happens to someone and through no fault of their own, they exhaust their account? Are these people just out on their own? Thrown out on the street? That's not the American tradition. It's unfair and cruel," he says.

Sanford, however, maintains that the lower class will benefit, telling Columbia's The State that the plan focuses on "social justice ... if I didn't think it was better than the current system, I wouldn't be proposing it."

Kost echoes the governor, asserting, "Right now, you have 500 employees running healthcare for a million people. We have to make decisions across the board that will affect the whole group. We are trying to move to a plan in which people make individual decisions."

A recent Medicaid panel discussion held at the College of Charleston and led by Sen. Coburn on behalf of the U.S. Senate Committee on Homeland Security and Governmental Affairs has also angered many local politicians.

On the Republican-appointed panel, only one state Democrat was invited to participate -- as a minority witness. Hutto claimed that the panel "wasn't a true meeting.

"Many weren't allowed to speak and many of us that wanted to participate weren't invited," says Hutto. "It was a political stunt."

State Sen. Robert Ford (D-Chas.) told The State that the hearing was "ridiculous" and "a sham."

"If they wanted to find out how it really worked, they would have accepted testimony from others," Hutto continues.

Perhaps the biggest criticism of Sanford's Medicaid plan is that it merely provides a Band-Aid for what is indicative of a much bigger problem -- as a whole, the cost of health care is rising at a higher inflation rate than the rest of the economy. Senator Hutto argues, "We need to look at the entire problem, not just the 5 percent that qualify for Medicaid. It's a legitimate problem to focus on -- I just don't want to have a predetermined outcome."


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