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Medicaid expansion the smart choice

First Posted: 1:17 am - August 2nd, 2015

By Phil Noble - Contributing Columnist



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Fifty years ago this week, President Lyndon Johnson radically changed the lives of millions of Americans for the better with the stroke of a pen when he signed Medicare into law.

Now, with the stroke of a pen, Gov. Nikki Haley could radically change the lives of hundreds of thousands of South Carolinians for the better by signing the expansion of Medicaid into law.

She won’t do it.

Since the days of President Franklin Roosevelt, government provision of health care has been an enduring and controversial subject in American politics and society. The most recent installment (though surely not the last) of this national debate was about Obamacare. There were many provisions and facets of the debate, and the rhetoric was often extreme and vitriolic. Nothing new there.

First, President Lyndon Johnson and the facts. A divided Congress passed Medicare legislation in 1965. The language and scare tactics of the public and political debate are familiar — “It’s socialized medicine…this is big government taking over health care… we can’t afford the cost… it’s just another welfare program for people who live off the government”…and on and on it went.

Fifty years later, according to an authoritative study by The Commonwealth Fund, these are the facts:

• Before Medicare, 48 percent of Americans 65 and older had no health insurance; today that figure is just 2 percent.

•In 1966, older Americans paid 56 percent of health care costs out of their own pocket, today it’s 13 percent.

•With adequate access to health care, Medicare has contributed to a five-year increase in life expectancy.

•Today, Medicare covers 55 million Americans, about 17 percent of the population.

•Its beneficiaries are the nation’s oldest, sickest and most disabled citizens. Nearly 30 percent of the beneficiaries are either over age 85 or disabled and under 65 years old.

One can find some people somewhere who today oppose Medicare, but the reality is that they number very few — and they are on the radical fringe of politics. Medicare has become woven into the fabric of American life and is a vital part of our society.

Next, Gov Nikki Haley and the facts. A key part of the Obama administration’s efforts to make health care available to all Americans was expansion of Medicaid, i.e. the government insurance program for people of all ages whose income and resources are insufficient to pay for health care. Unlike Medicare, which is a federally run program, Medicaid is administered by the states and many of the rules and regulations are different from state to state.

The Obamacare provisions expanded eligibility for Medicaid to those whose income is below 138 percent of federal poverty levels ($32,913 for a family of four) but states were not required to expand their coverage. This is where the current bitter partisan politics raised its ugly head.

As a part of the Republican sound and fury against the evils of Obamacare, many Republican state governors — Haley foremost among them — refused to take the federal funds available to expand Medicaid in their states. Their two principal talking points were “socialized medicine,” etc. (see above from 1965) and the claim that the states could not afford to pay their 10 percent share of the cost (more on cost below). So, here are the facts on Medicaid expansion in South Carolina:

• With expansion, nearly 200,000 working South Carolinians who are not covered by their employers would receive health care coverage.

• Over the next five years, expansion would inject more than $10 billion in federal funds into our state’s economy.

• This money will create up to 40,000 new jobs — not only in direct health care jobs, but in many spin-off fields as well all across the state.

A few points about these big numbers are worth noting. First, if we don’t take the money, it goes to some other states; our refusal will not decrease our taxes one penny. Forty thousand jobs is a lot of jobs and they will be spread all over the state. By comparison, Volvo (which got $200 million in state incentives) will only provide 2,000 jobs now and perhaps as many as 4,000 by 2030. Volvo is great; Medicaid expansion is even better.

The prime argument of Medicaid expansion’s critics is that the state will eventually have to pay 10 percent of the cost of expansion. Fair enough, but the state’s hospital association has said that it will pick up some or all of this additional cost and there are a lot of other reasons why it’s still a very good deal. Put up $1, get $9 back.

Perhaps most compelling is that Republican governors in 13 states have supported their state’s Medicaid expansion in one form or another.

In time, we will most likely have some version of Medicaid expansion in all 50 states — and at some point after that, like Medicare before it, Medicaid expansion will become part of the fabric of American life.

Back when the Obamacare debate was at its hottest, one rabid Tea Party protester I saw on television was waving a sign that read, “Keep your government hands off of my Medicare.”

Fast forward a few years, past all the hot and shrill rhetoric, and expect to see signs reading “Keep your government hands off my Obamacare.”

I look forward to that day.

Phil Noble is a businessman in Charleston and president of the S.C. New Democrats, an independent reform group started by former Gov. Richard Riley. Email him at phil@scnewdemocrats.org.

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By Phil Noble

Contributing Columnist

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