Legislature must look in mirror to find Medicaid blame

February 27, 2011 

A few weeks ago, a $228 million Medicaid deficit was laid at the doorstep of the state's General Assembly, and legislators on both sides of the political aisle have been scrambling ever since to blame someone. First they said the former state Health and Human Services director was incompetent. Then they chastised the state's Budget and Control Board and the State Budget Office for not providing adequate oversight. And just last week they accused former Gov. Mark Sanford of underestimating health-care costs.

As a member of the agency deficit subcommittee appointed by Sen. Glenn McConnell, I will work with my colleagues to uncover the facts and then follow wherever they lead us. But one thing I know for sure right now: A primary cause of the Medicaid deficit is poor public policy enacted by the General Assembly. Specifically, the legislature's role in creating the problem can be boiled down to three things:

  • It ignored warnings that accepting so-called stimulus money would make it almost impossible to control Medicaid costs in the future.

  • Through a complex and sometimes anonymous budget proviso system, it protected the profits of special interests that benefit financially from our Medicaid system.

  • And it prohibited our state's Health and Human Services director from using basic Medicaid cost-control measures enjoyed by the directors in every other state.

    In 2009, my first year as a state senator, I joined McConnell and 11 others in voting against accepting $740 million in one-time federal stimulus money to grow our state's Medicaid program far beyond our ability to sustain it. The price for taking that money -- giving away our ability to control the size of the Medicaid pool in the future -- was simply too high.

    But a majority of lawmakers wanted the money, and so we took it. And predictably, the number of people on our Medicaid rolls has skyrocketed. There are now more than 975,000 South Carolinians receiving Medicaid benefits, with thousands more added each month. And we are powerless to stop this growth because the original restrictions on cost containment were codified last year as part of the health care reforms pushed by President Barack Obama.

    Lawmakers also have driven up Medicaid costs by dictating, through budget provisos, what care is to be provided, how much is to be paid and to whom. Budget provisos in Columbia are like earmarks in Washington; they allow lawmakers to protect well-connected special interests without having to identify themselves. Provisos simply appear seemingly out of thin air. The current state budget has 946 provisos, and here are a few that drive up Medicaid costs:

  • Reductions in fees paid to certain health-care providers are outlawed.

  • Funding for certain health centers is protected.

  • Increases in payments to specific care facilities are required.

  • Coverage for chiropractic services is mandated.

  • Reductions in pharmacy reimbursement rates are prohibited.

  • Brand-name drugs are allowed even if not prescribed per medical guidelines.

    Other states trust their Medicaid directors to decide how to allocate a decreasing amount of money in order to provide the best possible health care to an increasing number of people. And yet in South Carolina we tolerate a politically driven process where those with enough money to buy access to lawmakers win and everyone else loses.

    This political access by big-time Medicaid players to lawmakers, of course, is provided by lobbyists. Here in America, hiring a high-powered lobbyist is simply good business. A recent economic study of the federal American Jobs Creation Act of 2009 found that for every dollar spent in lobbying, $220 worth of special favors were obtained. So in a very cynical sense, one can't blame the special interests for playing the pay-to-play game. But we can and should blame lawmakers.

    Gov. Nikki Haley has appointed Tony Keck, a health-care expert with a record of delivering quality health care services to the needy in a tight fiscal climate, to serve as the Health and Human Services director and manage our Medicaid program. The legislature needs to get out of the way and let him do his job, and it can start by getting rid of the special laws that protect the favored few.

    There's reason for hope. On Thursday, the Senate gave second reading approval to S.434, a bill sponsored by Sens. Harvey Peeler and Kevin Bryant to suspend four of the special-interest protections. Here's hoping that the General Assembly passes that bill quickly, and then kicks the proviso habit for good.

    Tom Davis of Beaufort represents Beaufort County in the state Senate.

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