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Opinion: Before You Go Whacking Medicaid…

With revenues reduced to a trickle, some states are considering drastic measures to balance their budgets. Gov. Rick Perry of Texas has proposed abandoning Medicaid, the federally mandated program that provides health care for the poor. That idea also has its advocates in Florida, Nevada and here in South Carolina.

But before ditching Medicaid, let’s do ourselves the favor of considering this cautionary tale from Indiana.

Indiana’s experiment with Medicaid a flop


Nov. 20, 2010, 3:59PM

The health policy world is in a tizzy. Texas is thinking about dropping Medicaid. Gov. Rick Perry thinks a private solution can work better. Several other states are paying close attention and considering doing the same.

Texas’ actions shouldn’t come as any surprise. Legislators and others in Texas, Florida, Nevada and elsewhere started threatening to drop Medicaid months ago, claiming they could create a better and cheaper program by providing subsidies for private coverage for the poor.

We’ve heard about how private business works better and cheaper than government for many years now. We’ve made a lot of public policy decisions based on this premise. Consequently, we also have some data on how well this has worked. How much better and cheaper has the private market in fact functioned in comparison with government programs?

In the case of Medicaid, we have a particularly good example from Indiana. The state’s Healthy Indiana Plan offers subsidies to help certain low income uninsured people purchase private health insurance plans, in lieu of offering them traditional Medicaid. The concept sounds irreproachable. Beneficiaries who otherwise wouldn’t be able to afford coverage get it, health care providers get better reimbursement than they would if the beneficiaries were covered via Medicaid, and the state pays less than it would if it offered the beneficiaries traditional Medicaid coverage. What’s not to like?

Unfortunately, lots. First, many beneficiaries have to pay a lot more out of pocket than they would if they had traditional Medicaid coverage. Nonpayment has been the No. 1 reason for terminating beneficiaries from Healthy Indiana since the program began in 2008, with up to 35 percent of beneficiaries in certain income levels failing to make their first payment.

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Factcheck.org Goes In-Depth On Anti-ACA Distortions

From factcheck.org:

The Truth About Health Insurance Premiums

The new law has brought increases for some. But GOP leaders exaggerate.

November 19, 2010


Leading Republicans in Congress are blaming the new health care law for double-digit rate increases being sought by insurance companies in Washington state, New York and Connecticut. But insurance regulators, leading health care experts and the companies themselves mostly blame an old culprit: rising medical costs.

Improved benefits required by the new law are responsible for a relatively small portion of the increases. Furthermore, the increases apply mostly to those buying policies individually, not the majority who get private insurance through employers. Those with employer-provided plans won’t see as much of an increase in premiums, since many of their policies already include the required benefits, a spokesman for an insurance trade association told us.

Some Republicans have claimed the law is responsible for “whopping” premium increases, but they have misrepresented the facts in the process. For example:

  • House Speaker-in-waiting John Boehner said premiums will “skyrocket” because of the law, citing a report on rising premiums by the Kaiser Family Foundation. But the Kaiser report covered increases that took effect before the law was signed.
  • Senate Minority Leader Mitch McConnell points to a news story about a Washington insurance provider that blamed premium increases on the health care law. But the state insurance commissioner says the increase had “absolutely nothing to do with health care reform,” and the insurance company later admitted the law is only partly at fault.
  • Both politicians refer to premiums for new plans on the individual market, where only about 6 percent of those with insurance now get their coverage.

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CHIP Assistance – Cover Your Kids, South Carolina

Need help getting your child covered? Contact our friends below and let them walk you through the CHIP application process.


Palmetto Children’s Health Initiative

Linking Every SC Child to an Affordable & Appropriate Medical Home

In November 2009, the Palmetto Project announced the launch of a new statewide initiative to link every child under age 18 to a medical home that is both affordable and appropriate.  There are 111,000 uninsured children in the state, most of whom are also eligible for the state’s SCHIP health insurance for children in families with incomes up to 200% of poverty.

“Children are falling through the cracks in a state where there is care that is available.  When they do get care, it is very often in an emergency room,” said Palmetto Project Executive Director Steve Skardon.  “We expect to see costs go down.  Having children go without medical care is far more expensive than having them under the care of a physician.”

The program will be a combination of roll-up-your-sleeves canvassing, state-of-the-art data collection and tracking, and public education.  The first year of the project will be concentrated in areas along the coast of where the largest numbers of uninsured children live.  After that the initiative will be expanded to all 46 counties.  The initiative is funded by a grant from the U.S. Department of Health & Human Services.

  • An estimated 111,000 SC children 17 and under are without health insurance of any kind.  Most of them are likely eligible for Medicaid or SCHIP coverage.


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