The leader of the state agency which oversees Medicaid is warning lawmakers that the number of South Carolinians who rely on the health program could increase faster than the state can pay for them.
State Department of Health and Human Services (SCDHHS) director Tony Keck briefed several legislators on a Senate Finance subcommittee in a Wednesday meeting. He said the agency estimates it needs $194 million to keep up with more people enrolling in the program. However, the South Carolina Board of Economic Advisors is only predicting $187 million in additional tax revenue for the entire budget next year.
“The clear problem we’re in is that we’ve requested every single new state dollar… plus,” Keck told three senators at Wednesday’s meeting, “And that’s why I don’t call it a budget request. It’s a budget submission because we’re clear that this is not what the governor is going to approve (in her budget).”
The agency turned in its submission as Governor Nikki Haley’s office prepares to draw up a proposed budget for the 2013-14 fiscal year.
SCDHHS expects to spend $70 million more as new healthcare exchanges required by the Affordable Care Act take effect in October. Keck says there are roughly 140,000 South Carolinians who are privately insured and are also eligible for Medicaid. He says it’s difficult to predict how many people will drop their current plan for free Medicaid services, since they may not be aware of their eligibility until the exchange offers them the option. Others could enroll if their employers no longer offer insurance coverage because of the law, he said.
“I can’t caveat this enough to talk about the uncertainty in these projections,” he said.
Keck also said that other factors are causing the projected cost increase on top of that. SCDHHS is continuing to roll out its “Express-lane” program that seeks to enroll South Carolina who are already eligible and are receiving welfare or other government benefits. He said the loss of $60 million in cigarette tax money also hurts. Excess revenue from the 50-cents-per-pack tax had been used to avoid budget deficits at the agency over the past two years, but the account is now drained.
Lawmakers said it was too early to speculate how the state will cover the projected costs next year. “I do think it does demonstrate the magnitude of the issue,” State Sen. Thomas Alexander (R-Walhalla) said after the meeting, “What they were requesting just to maintain the program as it exists today… is going to take more revenue than what’s projected to come in.”