Hospital Bills Unpaid as S.C. Shuns Medicaid Expansion

Shirley Johnson gets her medical care at Palmetto Health Baptist hospital’s emergency room in Columbia, South Carolina. She goes when her back gives out or when a benign tumor near her ribcage swells and throbs. She goes for headaches, heartburn, and spider bites, leaving the hospital a sheaf of unpaid bills.

“I owe so much money,” said Johnson. “The last time I went just for my toe. It cost $1,000.”

Johnson, as a 49-year-old with no dependents, isn’t eligible for Medicaid, the joint state-federal health program for the poor, which covers about 20 percent of the state’s residents. And in two years, when President Barack Obama’s health-care overhaul allows the expansion of Medicaid to cover 17 million more Americans, she may still be left behind.

Governor Nikki Haley, a Tea Party-backed Republican, was among the first state leaders to oppose expanding Medicaid after the U.S. Supreme Court ruled that the federal government can’t make states do so. Caught between poverty and pressure to curb government’s power, South Carolina illustrates the forces at play in the nation’s capitals amid the broadest changes to the health care system since 1965.

In South Carolina, the law would add about 500,000 people to Medicaid, said Tony Keck, whom Haley appointed to head the Health and Human Services Department.

‘Broken Program’

“We simply can’t support this,” Haley and Keck said in a July 3 statement. “We are not going to jam more South Carolinians into a broken program, a program that stifles innovation, discourages personal responsibility, and encourages fraud, abuse and overuse of services -- and that, by the way, costs us billions of dollars.”

Republican governors of Louisiana, Florida, Iowa, Mississippi, and Texas also oppose the plan to boost the scale of the health-care program. Texas Governor Rick Perry said today he won’t do anything to implement the president’s law. In his state, about 25 percent go without health insurance, the nation’s highest rate, according to Census Department figures.

“I stand proudly with the growing chorus of governors who reject the Obamacare power grab,” he said.

States’ decisions about Medicaid will determine the fate of a key provision of Obama’s plan to extend care to the uninsured, one that would make the program available to everyone earning less than 133 percent of the poverty line -- $30,657 for a family of four. If states don't go along, millions of Americans would be left uncovered, without access to the program and unable to qualify for the insurance subsidies available to those with higher incomes.

Ready Money

The federal government would pay 100 percent of the costs for those newly enrolled until 2017, when its share would begin to decrease to 90 percent. Some states are leery of adding enrollees as pressure on federal spending may put those funds at risk, said Matt Salo, the head of the National Association of Medicaid Directors in Washington.

“There is an enormous amount of federal dollars that are being put on the table,” he said.

“On the other hand, there are risks associated with this. States are having trouble sustaining the current Medicaid program,” he said. “Ten percent of a very large number is still a lot of money.”

Too Tempting

The flood of federal funds may be difficult to turn down, said Ron Pollack, executive director of Families USA, a Washington nonprofit that advocates expanded health-care coverage. All the states participate in Medicaid and the Children’s Health Insurance Program, which assists families that make too much to qualify for Medicaid, even though the federal share is less than what they are set to receive under Obama’s plan, he said.

The federal government will pay $931 billion of the cost of the Medicaid expansion through 2022, with states paying $73 billion, according to the Center on Budget and Policy Priorities, a Washington-based group that argues against cutbacks that hurt the poor.

“At the end of the day -- and maybe the end of the day is after the November election -- I think all or virtually all of the states will agree to participate,” Pollack said. “It is truly fiscal malpractice for them to turn it down.”

The effects would be felt broadly in South Carolina, where about 16 percent live below the poverty line. The unemployment rate in May was 9.1 percent, nearly a full percentage point higher than the U.S. as a whole. The state ranks as the nation’s fifth-least healthy, according to Haley.

Ceding Power

The state where the Civil War began has also long been suspicious of ceding power to the federal government, said Bruce Ransom, a political scientist at Clemson University in Clemson, South Carolina.

One of the state’s U.S. senators, Jim DeMint, is a founder of the Tea Party Caucus. In 2009, then-Governor Mark Sanford sparred with the Obama administration and his own Legislature, seeking to use $700 million from the stimulus program to pay down debt instead of spending on the economy.

“Federal aid, federal programs -- unless it’s for the military -- are not good things,” Ransom said, summarizing voters’ views. “That plays here. The conventional wisdom says that’s a winning hand.”

Keck, South Carolina’s top health official, said the state’s illnesses are driven by poverty and that money poured into Medicaid would best be used elsewhere. Keck said he and Haley favor block-grant funding that would hold the state accountable for set outcomes, such as lowering obesity.

Getting By

“We should spend our money getting more people jobs with health insurance,” Keck said. “If we’re going to talk at all about targeting the uninsured, it has to be with a completely different system than Medicaid.”

Being employed hasn’t yet helped Ilyasah Borden, a 23-year- old single mother who makes $9.24 an hour as a cashier at a Lowe’s Cos. (LOW) home-improvement store in Columbia. While her three children get care through Medicaid, she can’t. Right now, she goes without insurance and may have to wait until next year to get on the company’s plan.

“My biggest problem is my teeth,” she said. “I have fillings that are falling out.”

“It’s like there’s no help for the people who are really trying to work,” Borden said.

State Senator Darrell Jackson, a Democrat from a Columbia suburb who sits on the finance and medical affairs committee, said he plans to rally support for expanding Medicaid in the Republican controlled legislature. He said he’s confident lawmakers can be persuaded to buck Haley’s position, just as they challenged Sanford’s rejection of Obama’s stimulus money.

Wide Reach

“South Carolina is basically a poor state,” he said. “There are very few legislators’ districts that would not be affected by this.”

Haley also faces challenges from the state’s hospitals, burdened by serving patients too poor to pay. Without more residents on Medicaid, hospitals will suffer, said Allan Stalvey, a lobbyist for the South Carolina Hospital Association. He said his group will press legislators and Haley’s administration for the expansion.

“We’re concerned about it,” he said. “We’re hopeful we can work something out.”

Across South Carolina, hospitals offered $1.6 billion in care to uninsured indigents in 2011, according to Chris Finney, program manager for the state’s Office of Research and Statistics.

In Columbia, Shirley Johnson isn’t the only one who turns up at the emergency room when she’s sick.

Ailing State

Her zip code is the sickest in South Carolina, which is one of the sickest states in the country, according to Kate Hilton, director of Organizing for Health, which began a campaign targeting the area this year. Postal code 29203 has about 45,000 residents, a third with no insurance, the group’s figures show. They make 90,000 visits to emergency rooms a year. A third of those visits are from people who can’t pay.

Johnson said she never imagined her current straits, and that she worked until she no longer could after hurting her back 12 years ago.

“I’m a jack of all trades and master of none,” she said. “I even sold cans and bottles for five cents apiece.”

She lives with her daughter, Kelly, who also goes without insurance.

Kelly Johnson has five children, a 9-year-old and two sets of twins, 7 and 6 years old. The children are on Medicaid. Kelly Johnson said she earns $9.25 an hour as a medical assistant, too much to qualify.

Both women said they didn’t understand why South Carolina wouldn’t take part in a program that would give them insurance, and that it wasn’t right that richer people would get subsidies they can’t.

“My mom can’t get Medicare and she can’t get Medicaid and she can barely walk,” Kelly Johnson said. “It’s not fair, because if you need care, what are you going to do?”

To contact the reporters on this story: William Selway in Washington at wselway@bloomberg.net; Margaret Newkirk in Atlanta at mnewkirk@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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