2006 State Report > Economics > Medicaid
Economics: Medicaid
Medicaid is a program jointly funded by state and federal governments that provides health coverage to low-income Americans. For older adults with low incomes, it serves to assist eligible Medicare beneficiaries with Medicare premiums and cost-sharing. For low-income adults aged 65 and older who meet eligibility requirements, Medicaid can cover Medicare Part B premiums.
Medicaid's state and federal dollars provide health coverage for about 874,000 people in South Carolina, including coverage for three of four nursing home residents. The percentage of the state's general-fund budget that went to Medicaid increased from 10 percent in fiscal year 1995 to 19 percent in 2004. Forecasts show that without changes to the program, Medicaid will take up 29 percent of the budget within the next decade. In 2004, state and federal Medicaid spending in South Carolina totaled $4.2 billion.
In state fiscal year 2003-04, there were 116,748 unduplicated Medicaid recipients aged 65 and older in South Carolina. Total Medicaid expenditures for the 65-and-older population were $795,870,947.
In early 2006, Congress approved $35 billion in cuts to Medicaid, Medicare, and student loan programs, clearing the way for states to alter their Medicaid plans. Among the proposed changes to South Carolina's program are:
- New co-payments for doctor visits.
- Co-payments for non-emergency visits to hospital emergency rooms.
- Requirements that Medicaid recipients belong to a medical home network.
- The new law tightens Medicaid long term care eligibility rules and allows for the nationwide expansion of the Long Term Care (LTC) Partnership program.
- The look back period for the transfer of assets will change from three to five years prior to applying for Medicaid coverage. This will be phased in.
- The legislation will deny Medicaid coverage for nursing home care to any applicant with home equity valued above $500,000. This can range up to $750,000 in some states.
- The new law expands the availability of the states to participate in the Long Term Care Partnership program. Each state can implement a program and allow individuals to purchase long term care insurance in order to protect a portion of their assets that they would typically need to spend down prior to qualifying for Medicaid coverage. Once a state implements a program, any tax qualified long term care insurance policy approved by the South Carolina Department of Insurance that meets the requirements of the federal partnership program would qualify for asset protection, on a dollar-for-dollar basis, up to the policy maximum.
These changes to the program could go into effect as soon as January of 2007. South Carolina will also attempt to become part of a 10-state pilot program to test health savings accounts for Medicaid recipients. These accounts would combine a high-deductible insurance plan with a tax-free savings account that people can use to pay for health care as they choose.