Rural Health Policy Project

South Carolina’s Medicaid Proposal Will Harm Children and Families

South Carolina is the latest state to consider imposing a work requirement on parents receiving Medicaid. While there’s no formal proposal yet, officials have outlined their plans in a concept paper that raises as many questions as it answers.

In a report we released today, we outline the problems with imposing a work requirement in a state like South Carolina that has not expanded Medicaid under the Affordable Care Act (ACA). It’s clear that such proposals would only impact families with children – and those families with children are some of the most vulnerable in the state with extremely low incomes.

South Carolina’s proposal would impose a work or community service requirement of at least 80 hours per month on parents with incomes at or below 67 percent of federal poverty level. These are families whose income is no more than $1,160 a month for a family of three. There is a vague exemption for a parent caring for a disabled adult or a child, but it’s not clear how that will be defined. Medicaid eligibility will be contingent on complying with this new requirement – in other words if a parent isn’t exempted or appears not to comply they lose their Medicaid.

The stated goal is to help families rise out of poverty and achieve independence. This is a worthy goal. However, the proposed policy will not achieve this goal – in fact it is more likely to have the opposite effect by taking away health coverage from very vulnerable families – exposing these parents and children to more financial risk and poorer health. The proposal will do nothing to ensure that barriers to employment such as child care, transportation and lack of available jobs will be addressed – and the federal government has been clear that no new funding is available to address these barriers.

The state asserts that 180,000 parents will be subject to the new rules. In order to maintain their Medicaid coverage, they would have to either receive an exemption or comply with the new work requirement.  This will likely require significant and costly investments in the state’s IT system which already faces challenges handling current Medicaid eligibility demands. South Carolina is processing only 18 percent of its applications online – a rate significantly lower than the national average of 50 percent.

The state’s proposal lacks significant details such as estimating how many parents would lose coverage. However, the history of work requirements in the TANF program and estimates from other states pursuing work requirements suggest that thousands will lose coverage.

An insured parent almost never has an uninsured child, but a parent not having coverage raises the odds that the child too will be uninsured.

Who are these families? Our analysis found that the vast majority are mothers (85 percent) and 37 percent are parents under age 30. They are more likely to live in rural areas and small towns. Almost half of these parents (46 percent) are not in the workforce because they are caring for a child or someone with a disability. Only 22 percent describe themselves as unemployed. The remainder are reporting some work.

These new policies are also likely to disproportionately harm South Carolinians living in rural areas and small towns. Residents of South Carolina’s small towns and rural areas are more likely to be enrolled in Medicaid and also face higher unemployment rates than their urban counterparts. Nine of the 11 South Carolina counties with the highest unemployment rates in 2017 were rural counties. A study we conducted last year with the University of North Carolina found that 17 percent of adults in South Carolina’s rural areas and small towns are enrolled in Medicaid as compared to 12 percent of adults in urban areas.

Children will also be harmed if parents lose coverage. Research is clear that being uninsured raises the risk for parents and children to not be able to access the health services they need. Families will be at greater risk for medical debt and even bankruptcy. Parents could fall ill, affecting their ability to care for their children. And as parents become uninsured, children are more likely to not have coverage as well. An insured parent almost never has an uninsured child, but a parent not having coverage raises the odds that the child too will be uninsured.

In recent years, South Carolina has made significant progress in reducing the rate of uninsured children to 4 percent – this compares to 4.5 percent nationwide. This proposed new policy threatens that progress.

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy.

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