South Carolina May Reduce Services, Eliminate Coverage for Some Medicaid Beneficiaries to Address Budget Deficit

South Carolina officials last week imposed a 2.5% budget reduction on state agencies, including the state Department of Health and Human Services -- which would result in a $12.8 million reduction in the state's Medicaid budget -- to address the state's estimated $320 million budget deficit for the fiscal year that begins July 1, the Charleston Post and Courier reports. In addition, the state House Ways and Means Committee last week passed a budget that would provide $103 million for the health department, $81 million less than the amount that the department, which administers the state's Medicaid program, "needs to keep the program in its current form." The cuts will likely force the department to reduce optional services for Medicaid beneficiaries and eliminate coverage for non-categorically eligible beneficiaries. The Post and Courier reports that the department may reduce services or eliminate coverage in optional services such as the state's CHIP program or a program that provides Medicaid coverage for severely disabled children (Maze, Charleston Post and Courier, 3/28). In addition, the department may reduce Medicaid services for blind and disabled adults and for seniors who receive community-based long-term care (Freiden, Columbia State, 3/28). Frank Adams, a spokesperson for the health department, said that "no decision has been made" on the planned reductions in services for state Medicaid beneficiaries, but he added that "everything is on the table" (Charleston Post and Courier, 3/28). The department, as required by federal law, plans to send letters to state Medicaid beneficiaries before the end of April to inform them that their coverage "could be reduced or eliminated." In addition, the department will send letters about the possible reductions to the state's 40,000 health care providers and pharmacists (Columbia State, 3/28).

Tax Increases?
Meanwhile, state Sen. Verne Smith (R) last week called for a tax increase "specifically tied to increasing Medicaid funding," a proposal opposed by South Carolina Gov. Jim Hodges (D) and a number of other state lawmakers (Columbia State, 3/28). The AARP also has proposed a 44-cent increase in the state's cigarette tax to help cover the cost of the state's Medicaid program, but Hodges and many state Republican lawmakers oppose the plan (Charleston Post and Courier, 3/28).