Thousands more could get Medicaid coverage under SC request for limited expansion

COLUMBIA — Thousands more people in South Carolina could get Medicaid coverage under a request from the state to expand the program to working low-income parents.

While Gov. Henry McMaster wrote officials in January about the state's impending request, the state's Medicaid agency didn't actually submit it until late last month, after gathering public comments and holding hearings.

The submission happened to come in the midst of congressional negotiations over the GOP-pushed federal law signed July 4, which requires adults in states that expanded Medicaid to prove they're working, going to school or volunteering at least 80 hours each month.

That part of the massive package, slated to begin at the end of 2026, does not apply to South Carolina, according to the state's Medicaid agency. The Palmetto State is among 10 states that never expanded eligibility to all adults with incomes up to 138% of the federal poverty level, as intended under the 2010 law known as Obamacare.

However, South Carolina is still seeking its own, albeit very limited, version of an expansion.

Meeting requirements

If the Trump administration approves South Carolina's request, an estimated 11,400 parents with incomes between 67% and 100% of the federal poverty level could be newly covered by Medicaid. And they would have to meet those same 80-hours-per-month requirements as new federal law mandates in most other states. The difference would be that those rules would apply only to South Carolinians newly qualified for coverage.

The goal is to help close a health care coverage gap for those parents, according to the state's application, submitted June 23. Under existing rules, parents who make more than 67% of the federal poverty line, which is just $21,540 annually for a family of four, can't get Medicaid coverage. But federal subsidies to buy private insurance on the marketplace don't kick in until 100% of the poverty line, or $32,150 for that same family of four.

That can discourage people from searching for a higher-paying job out of fear of losing their health insurance, officials wrote in the state's application.

"This creates a perverse financial incentive for individuals to keep their incomes artificially low for risk of losing healthcare coverage and bearing the full cost of health services," the application reads.

Expanding reach

An estimated 17,700 people would qualify for the program under the changes, according to the state's application to the federal Medicaid agency. A federal funding formula would limit the actual number to 11,400.

Officials expect hitting that enrollment cap to take five years, according to the application.

The changes wouldn't apply to people already enrolled in the state's Medicaid program, including elderly, pregnant and disabled people. Childless adults would remain ineligible for Medicaid in South Carolina's program, according to the application.

The requirements are similar to those already required for people receiving benefits through the Supplemental Nutrition Assistance Program (SNAP), often called food stamps. People making up to 100% of the federal poverty level can continue qualifying for SNAP if they can prove they're working up to 80 hours each month, unless they qualify for an exemption.

The overlap was intentional, Medicaid spokesman Jeff Leieritz said previously. If a person is already proving they're working to get SNAP, they should more easily be able to receive the expanded Medicaid benefits, he said.

Sobering numbers

As of 2020, 521,660 South Carolinians under the age of 65 were uninsured, according to the most recent data from the state Revenue and Fiscal Affairs Office.

Sue Berkowitz, director of Appleseed Legal Justice Center, said she was glad to see that more people would have access to health care. She worried the program still had too many barriers, since getting a job or volunteering isn't always easy for people without transportation, people in rural areas with fewer opportunities and people who can't afford child care, she said.

More exemptions for those situations would allow even more people who fall in that coverage gap to access health care, said Berkowitz, who is part of a group advocating for the state to expand Medicaid.

"Health care shouldn't be something that's dangled in front of you or used as a stick" to get people to work, Berkowitz said.

The program is meant to be narrowly tailored to working families, the Medicaid agency said in the application, addressing similar concerns raised during two public hearings.

"By maintaining a community engagement requirement for participation, the program aims to reinforce the proven link between improved economic self-sufficiency and improved health," the application reads.

A long history

South Carolina has been pursuing similar requirements that people work in order to receive Medicaid benefits for years.

The federal Medicaid agency approved a similar waiver for the state in December 2019, during President Donald Trump's first term. That version, however, would have applied the work-or-school requirements to all Medicaid enrollees, not just those newly qualified. It was paused when the COVID-19 pandemic began, and the Biden administration later revoked the permission.

McMaster sent a letter to federal officials in January asking them to speed along the state's forthcoming application. The state Medicaid agency took public comments on the proposal from April 30 to May 31 and held public hearings May 6 and May 13.

The federal Medicaid agency has not yet responded to the application, according to the state's agency.

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