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Medicaid's Fort Sumter

August 16, 2005

When South Carolina makes the headlines, it's rarely good news for the United States or the American people. In 1828, South Carolina was the hotbed of the Nullification movement. In 1860, South Carolina's secession led the way to the Confederacy and in April the following year, fired the shots at Fort Sumter that started the Civil War. And over the past several years, South Carolina has been at the forefront of the movement to preserve the Confederate flag and heritage.
Now, the Palmetto State is again leading the way, this time by undermining Medicaid, the federal health care program for low income Americans. By seeking to move from a system of "guaranteed benefits" to one of "guaranteed contributions", South Carolina's step is the opening salvo in the war over social insurance.
As AP reported today, South Carolina seeking to dramatically overhaul its Medicaid program, one which currently serves 850,000 residents. Dealing with a program that already consumes 19% of the state budget (and estimated to rise to 29% in a decade), South Carolina has proposed moving to a system of health care accounts instead. These accounts would allow recipients to purchase private insurance or pay for care directly. State payments to the accounts would be based on the recipient's age, gender and physical condition.
To implement its plan, South Carolina needs the blessing of the Centers for Medicare and Medicaid Services, the agency which monitors the dispersal and spending by state of federal budget dollars. The state has already submitted its 42-page application for a waiver from the federal rules.
While the state Health and Human Service department in Columbia is waiting for its green light to proceed, the battle lines in the war over entitlements are rapidly forming. On the right, groups like the Heritage Foundation and National Center for Policy Analysis are cheering South Carolina's free market focus and emphasizing the value of personal responsibility. As NCPA's Devon Herrick put it, "If they've made wise choices, they might have money left over. If they've made poor choices, it might take some money out of their pockets."
On the other side, the Center for Budget Policy and Priorities views the move by South Carolina as a clear attempt to cut benefits, putting the health of the state's most vulnerable residents at risk. Judith Solomon of CBPP worries that low income residents will go without health care rather than pay out of pocket for care, and as a result, "I think they'll definitely be left unable to get the health care they need and could suffer serious harm."
Welcome to the future of the debate over health care, retirement security and social insurance in the United States. The wave of glowing assessments of "guaranteed contributions" by conservative foundations and think tanks, and by some moderate ones as well, is already underway. Using the guise of market efficiency and "customer driven health care", conservative will pit state against state in a race to the bottom.
As in the past, we can only hope that South Carolina does not become the model for the nation.


About

Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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