Rural Health Policy Project

New Report Finds South Carolina’s Medicaid Waiver Would Leave Thousands of Poor Parents Uninsured

[Editor’s Note: On March 4, 2019 South Carolina posted a revised application for state public comment.]

Just before the holidays, South Carolina posted its application for new work-related reporting rules for very low-income parents and caretaker relatives with incomes below 67 percent of the poverty line who are insured through Medicaid.

Today we partnered with South Carolina Appleseed Legal Justice Center to release an analysis of the proposal. The news is not good: Thousands of the state’s poorest parents could lose health coverage, impacting their children, as well.

Because South Carolina has not expanded Medicaid under the Affordable Care Act, these parents are the only adults covered by Medicaid who are not severely disabled. These new restrictions would impact vulnerable families whose income is no more than $1,160 a month for a family of three.

If the federal government approves the waiver, the state would be able to terminate Medicaid coverage for parents who do not successfully navigate a new bureaucratic maze to report 80 hours of work or related activities every month. Some might lose coverage because they don’t meet the 80 hour requirement, but others would lose coverage simply because they are unaware of the new rules and how to comply with them or how to seek an exemption.

The experience in Arkansas, the only state to implement such work reporting requirements, is a stark cautionary tale. Approximately 17,000 Arkansans have already lost health coverage in the last few months of 2018. Also clear from the Arkansas data is that most of these folks are not losing coverage because they aren’t working, but rather because they are unaware of or getting tripped up by the bureaucratic red tape. Less than 1 percent of those subject to work reporting rules in Arkansas are newly reporting work – so the policy is failing to achieve its purported goal of supporting work.

South Carolina acknowledges that some parents will lose coverage, but you need a calculator and a fair bit of experience reading the fine print of Section 1115 budget neutrality documents to figure that out.  On page 8 of the proposal the state writes: “Accounting for the non-primary child caregiver, non-elderly and non-working population, 7 percent of remaining members are estimated to not fall into other compliance and exemption categories based on KFF national estimates. This is the population removed from enrollment figures due to the waiver’s implementation.”

Translation: The state projects in the accompanying table that an annual equivalent of approximately 1,600 parents would lose coverage in the first year and about 3,000 would lose coverage by year 5 if the new rules are implemented.

The state’s projections are far too low. We estimate that between 5,000 to 14,000 parents would lose coverage in the first year and by the fifth year of implementation enrollment would be reduced by 9,000 to 26,000 parents from current projections.

Who are these families? Our analysis found that the vast majority are mothers (86 percent) and they are disproportionately African American. Families living in rural areas and small towns would be harder hit as well, which would have ripple effects on rural hospitals and other providers in these communities. These families are living in deep poverty and suffer high rates of residential instability making it harder to comply with complex bureaucratic demands.

And their children will also be harmed if parents lose coverage. As parents become uninsured, research is clear that children are more likely to be uninsured as well. An insured parent almost never has an uninsured child, but when a parent does not have coverage it raises the odds that the child too will be uninsured. This is very troubling because as our recent report on children’s coverage rates found, South Carolina was one of nine states to see a significant rise in the number and rate of uninsured children in 2017 for the first time in nearly a decade.

The stated goal is to help families’ health status by boosting employment. This is a worthy goal. However, the proposed policy will not achieve either of these goals – in fact it will have the opposite effect. The proposal will do nothing to ensure that barriers low-income women face to employment such as affordable and high-quality child care, transportation and lack of available jobs, particularly in rural communities, will be addressed – and the federal government has been clear that no new funding is available to address these issues.

Moreover, if these women did find low wage jobs, they would likely not be offered affordable health insurance – only 17% of workers living below the poverty line in South Carolina have employer-sponsored health insurance.

It is certain, however, that more parents will become uninsured if this proposal is enacted, and research is very clear that being uninsured is bad for your health. Having less access to needed health services such as medication to control chronic conditions such as depression or high blood pressure will create new barriers to work – not fewer. In addition, losing health insurance exposes these families to more medical debt and deeper poverty and puts children at risk of going uninsured as well.

South Carolina’s Department of Health and Human Services is accepting public comments on this proposal until January 22. The state is required to include a summary of those public comments and how they have responded to them in its submission to the federal government. The federal government will then also hold a 30-day public comment period before rendering a decision.



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.