MEDICAID THREATENED NATIONWIDE AND IN SC – AN UPDATE!
Federal budget proposals threaten major cuts to Medicaid, which would severely affect SC's ability to serve children, the disabled and the elderly, unless the General Assembly used state funds to offset federal cuts. These potential cuts would also gut our ability to pass Medicaid Expansion. Learn what we can do to educate our state legislators on these budget issues that could devastate our ability to serve the most vulnerable.
Medicaid Cuts Proposed in Congress
In late February, the US House of Representatives passed and the Senate is now considering a budget resolution to cut $880 billion, mostly from the Medicaid insurance program over the next 10 years – “pay-fors” to fund tax reductions that mainly benefit the well-to-do and corporations. These cuts are massive – equal to 29% of all state funding for Medicaid across the country. While the detailed proposals matter on the impact for each state, cuts of this level would reduce South Carolinians’ access to healthcare and severely limit our ability to close the insurance coverage gap in the future. Four approaches to cuts have been discussed:
Work requirements for adult 19-64 eligibility.
Sounds reasonable but addresses a work problem that is very small, and results in savings not from more work and employer insurance coverage, but from automatic disenrollment of those actually eligible for failure to meet the monthly documentation demands.
- Over 60% of Medicaid insured in SC work or are in school
- About 16% care for dependents full-time; 14% are too ill/disabled to work
(Source: Kaiser Family Foundation, Intersection of Medicaid and Work: An Update, February 2025)
Per enrollee caps on Federal funding.
SC already has the 6th lowest per enrollee spend in the country.(Source: Kaiser Family Foundation, A Look at Variation in Medicaid Spending Per Enrollee by Group and Across States, August 2024) Estimates of a federal cap impact on SC range from $4 billion to $13 billion Federal funding reduction over 10 years, requiring massive increases in state funding for Medicaid or major cuts to services such as community based care, cuts to already low provider rates which creates access problems, or cuts in eligibility levels and enrollment (Sources: Kaiser Family Foundation, A Medicaid Per Capita Cap: State by State Estimates, February 2025); Urban Institute, Imposing Per Capita Caps and Reducing the Affordable Care Acts Enhanced Match 2026-2035: Impacts on Federal and State Medicaid Spending, February 2025).
Restrictions on or eliminating use of provider fees as state match funding.
SC is one of 49 states that has some form of provider fees that are used as state match. Hospitals in SC pay a tax on revenue that is used to match federal funding for hospitals that have a high percentage of uncompensated care. Loss of this funding would require large increases in state funding or would result in hospital financial insecurity, particularly for rural hospitals.
Reducing the 90% match for Medicaid expansion/removing bonus for non-expansion states.
Lowering the Federal match to that for the basic Medicaid program - ~70% in SC – and removing the ~$900 million bonus, would greatly reduce the likelihood of expanding Medicaid to all very low income adults at a time when the number of uninsured is likely to soar (see below) Twelve expansion states - including NC - have “trigger” laws that would sunset expansion if the match was reduced.
We Need to Act Now!
We ask that your organization and members communicate to both our State legislators and to our US congressmen/women the harm these Medicaid cuts would do to your constituents, patients and providers. If you need a platform to communicate with our congressmen/women you may use this link.
