In fiscal year 2021—the first full budget year marred by the COVID-19 pandemic—states collectively spent 14.1 cents of every state-generated dollar to provide Medicaid coverage to low-income Americans; that was 1.5 cents lower than the 15-year average of 15.7 cents of every state dollar. A pandemic-related surge in tax revenue, coupled with temporary additional federal funding, contributed to the decrease in the share of state funds that were dedicated to Medicaid. But as federal pandemic aid concludes and Medicaid enrollment remains near historic highs, The Pew Charitable Trusts and other experts expect that share to rise by the end of the current budget year.

All but nine states spent a smaller share of their own dollars on Medicaid in fiscal 2021 than they had, on average, over the previous 15 years. Differences ranged from 4.5 percentage points in Tennessee to less than a tenth of a percentage point in Washington and Wisconsin.

States and the federal government share costs for Medicaid, which provides medical coverage for eligible groups of children, adults, people with disabilities, and the elderly. Medicaid is most states’ biggest expense after K-12 education.

Pew’s state Medicaid spending indicator excludes federal support, examining only the cost to states because that spending exerts pressure on their operating budgets, which rely on state-generated revenue.

Medicaid’s claim on each revenue dollar affects the share of state resources available for other priorities, such as education, transportation, and public safety. Federal law requires states to provide certain benefits for any eligible Medicaid enrollee, even during times of sluggish revenue growth. So policymakers have less control over growth in states’ Medicaid costs than they do with many other programs.

Most states posted a decrease in the share of state funds dedicated to Medicaid in fiscal 2021 compared with the previous year. Nationally, this share dropped by 1.7 percentage points—the most substantial annual drop since at least fiscal 2000. The extent of the declines ranged from 4.3 cents per state-generated dollar in California to a tenth of a percentage point in Arizona. A confluence of factors drove these significant declines, including a simultaneous increase in temporary federal Medicaid aid and higher-than-anticipated growth in tax revenue following the onset of the pandemic.

State Medicaid costs are expected to rise dramatically by the end of the current budget year. Survey data from the Kaiser Family Foundation shows that state costs rose by 13% in fiscal 2023 and are expected to increase by an additional 17.2% in fiscal 2024. In their survey responses, states identified the phaseout of enhanced federal Medicaid aid, provider rate increases, and slowing but still elevated enrollment levels as key drivers of these increased annual costs, which, coupled with weakening tax revenue collections, are likely to push up the share of state funds spent on Medicaid going forward.

State highlights

A comparison of the share of each state’s own-source revenue spent on Medicaid in fiscal 2021 with its average share over the previous 15 years shows that:

• Alaska’s share rose the most. In fiscal 2021, the state spent 15.6% of its own revenue on Medicaid, 6.2 percentage points higher than its 15-year average—equivalent to 6.2 cents more of each state-generated dollar. It was the only state where Medicaid reached its highest percentage of own-source spending since 2007.
• Besides Alaska, only North Dakota (1.4) and Kentucky (1.3) surpassed their 15-year average shares by more than 1 cent per state-generated dollar.
• Only two states spent more than one-fifth of their own revenue on Medicaid in fiscal 2021: Pennsylvania (20.2) and New York (23.6), which contributed the largest share of any state.
• The states that spent the smallest share of their own dollars on Medicaid in fiscal 2021 were Utah (4.4), Alabama (6.6), Oklahoma (7.2), Mississippi (7.7), and Hawaii and Idaho (both 8).

Trend drivers

In fiscal 2021, states collectively allocated $240.5 billion from their own resources to support health benefits for 86.3 million Medicaid recipients. This marked a 2.8% increase, or $6.6 billion in new spending, from fiscal 2020. But states’ own-source revenue grew even faster, leading to a drop in the portion of state funds dedicated to Medicaid coverage.

Higher enrollment is one of the major long-term drivers of growth in Medicaid spending; more than twice as many people were on Medicaid rolls in fiscal 2021 than in fiscal 2000. Until the onset of the COVID-19 pandemic, however, enrollment growth had been slowing. From 2000 to 2013, several factors fueled rising enrollment, including two economic downturns—which caused people to lose jobs and associated health insurance—and a gradual erosion of employer-sponsored insurance in general. From 2014 until the present day, millions more Americans joined Medicaid as most states implemented the optional expansion under the 2010 Affordable Care Act (ACA). But because the federal government absorbed the first three years of related expenses for those newly eligible enrollees, states only began picking up a portion of these costs in 2017.

Although the pandemic triggered a historic but temporary surge in Medicaid enrollment, states expect a decline in fiscal 2024 and 2025. This is largely because of the expiration of one-time federal pandemic aid and a related rule that prevented states from unenrolling individuals for the duration of the public health emergency from Jan. 31, 2020, to May 11, 2023. Strong economic conditions, including low unemployment, are also contributing to the downward trend in Medicaid enrollment, as more workers gain access to employer-provided health care.

Conversely, several factors are simultaneously exerting upward pressure on state Medicaid spending, including rising prescription drug prices and widespread increases in health care provider payment rates. Additionally, state policy choices, such as expanding coverage, or the potential impact of an economic slowdown could contribute to growth in Medicaid spending.

Medicaid spending by level of government

Medicaid is a state-administered program, but the federal government covered 60.3% to 83.5% of states’ bills for the program in federal fiscal 2021, for a total of 68% of costs. Federal spending on Medicaid grew by 12.5% that year, from $455 billion to $512 billion—the second consecutive double-digit annual increase since temporary enhanced federal aid was provided in early 2020.

The federal government covered the highest portion of state Medicaid costs in Mississippi (83.5%), New Mexico (82.6%), West Virginia (82.4%), Kentucky (81.4%), and Arizona (80.4%), and the lowest in New York (62.8%), New Hampshire (62.3%), Minnesota (60.9%), Wyoming (60.6%), and Massachusetts (60.3%).

Influence of federal policy changes

Recent changes in federal policies have significantly affected states’ financial responsibilities for Medicaid. In response to the economic challenges of the COVID-19 pandemic, the federal government increased the federal medical assistance percentage (FMAP) for Medicaid by 6.2 percentage points for the duration of the public health emergency. The enhanced FMAP, which was initially set to end on April 1, 2023, underwent a gradual phaseout throughout the 2023 calendar year, decreasing to 5% on April 1, 2.5% on July 1, 1.5% on Oct. 1, and concluding on Dec. 31.

As a condition of these enhanced federal funds, states were prohibited from removing individuals from their Medicaid programs, which lead to a surge in enrollment—from 71.1 million in February 2020 to 94.1 million by April 2023, a 32.4% increase.

The Consolidated Appropriations Act (CAA), which became effective March 31, 2023, marked the end of continuous Medicaid enrollment and allowed states to initiate unenrollment beginning in April 2023. At least 19.6 million Medicaid enrollees have been unenrolled as of April 4, 2024, according to the Kaiser Family Foundation. The CAA also initiated the phaseout of enhanced federal matching funds that concluded in December.

The federal government previously provided extra dollars to states to help cover the increased costs of higher Medicaid enrollment and declining state tax revenue associated with the 2001 and 2007-09 recessions. As the enhanced federal aid from the Great Recession tapered off between December 2010 and June 2011, states’ share of Medicaid costs spiked while their tax revenue was still recovering.

Since January 2014, the ACA has also provided an opportunity for states to expand their Medicaid programs with enhanced federal support. The law initially required states to expand Medicaid eligibility to all adults under age 65 who earn up to 138% of the federal poverty level, a change that the U.S. Supreme Court later ruled was optional for states. For states that chose to expand their coverage to this broader population, the federal government agreed to reimburse 100% of the expansion costs through 2016, then 95% of costs in 2017, and ultimately 90% from 2020 onward. As of the fiscal year that ended June 30, 2021, the time frame for this analysis, 36 states had expanded their programs in accordance with the ACA. Another four states had done so as of March 2024.

States that have expanded Medicaid coverage have typically drawn from their general funds to cover their share of the bill, and some have been able to offset the added costs with related budget savings, such as reductions in behavioral health spending. Several states also report using new or increased provider taxes and fees to help fund the expansion.

In 2006, the federal government began relieving states of prescription drug costs for “dual eligibles,” people who qualify for Medicaid and the federal Medicare program. In return, states must share some of their savings with the federal government through annual “clawback” payments, which are included in this analysis as part of state Medicaid spending.

However, the amount of federal reimbursement that states receive is just one of several factors that influence the wide range in the share of state’s own revenue spent on Medicaid. Among the other drivers are state Medicaid policy decisions—the breadth of health care services covered, eligible populations, and provider payment rates—and each state’s personal income levels. States with lower per capita income have higher federal reimbursement rates, and vice versa. The variation across states also is a function of tax and other policy decisions that determine state revenue and factors outside of policymakers’ direct control, such as state economic performance, demographics, resident health status, and regional differences in health care costs and practices. (For more information, see “State Health Care Spending on Medicaid.”)

Why Pew assesses state Medicaid spending

State Medicaid spending has a significant impact on state budgets. As the largest expense for most states after K-12 education, Medicaid's allocation from each revenue dollar directly influences the resources available for other key public services, such as education, transportation, and public safety. The federal government requires states to, among other things, provide matching funds to help cover the costs of Medicaid benefits for eligible enrollees, regardless of revenue conditions. This relative lack of state control over costs distinguishes Medicaid from many other programs and can be difficult for policymakers to navigate, especially when costs spike during economic downturns.

Justin Theal is an officer and Riley Judd is an associate on The Pew Charitable Trusts’ Fiscal 50 project.

For more than 30 years, I’ve experienced the wide range of complex issues facing healthcare providers, and I can’t remember a time when we were more concerned about the safety and security of our workforce.

South Carolina’s hospitals and health systems represent more than $28 billion in state economic impact and 77,000 employees. Many of those employees have taken an oath to “Do No Harm,” and I’m sad to say that same courtesy is not being given to them.

Healthcare workers account for roughly three-fourths of all nonfatal workplace injuries and illnesses due to violence in the workplace. According to government data, that nurse getting ready for her shift is five times more likely to be assaulted at work than employees reporting to virtually every other job.

It’s been said that the true measure of a society is how it treats the most vulnerable among us — but what about how we treat those who care for us in our most vulnerable moments?

Until now, we’ve only been able to rely on anecdotal stories from front-line workers to express this problem, but thanks to an upcoming report from the South Carolina Hospital Association and Antum Risk, we finally have actionable data to illustrate the impact of workplace violence on the state’s hospital workforce.

The South Carolina Workplace Violence Collaborative was established in 2023 to address the increased incidence of violence against healthcare workers. The collective includes aggregate data submitted by 48 South Carolina healthcare facilities, including acute care hospitals, physician practices, outpatient clinics and rehabilitation centers, in 2023. For standardization purposes and to isolate these events, only incidents of physical violence are included in the report.

South Carolina’s hospitals and health systems have created a national model for enhancing hospital safety and security with a voluntary data collective actively sharing incidents of workplace violence in their facilities, and we’re already learning valuable lessons:

• 68% of health care assaults in the state were committed against bedside nurses and nursing support in 2023.
• 96% of these incidents were initiated by patients; however, we are seeing a growing trend of assaults by patients’ family members and visitors.
• 80% of these incidents occurred in the emergency department or the patient’s room or bathroom.

Our hope is that by focusing on building a data collective around outcomes for employees, as we do for patients through our Zero Harm program, we can learn more about the conditions to eliminate preventable harm in our facilities. If we can use data to improve surgical outcomes, we should be able to apply those same principles to bolster employee safety.

South Carolina’s hospitals and health systems are already using cutting-edge solutions to improve hospital safety and security, including enhanced surveillance, elevated training for security officers, first-alert badges for staff and trained K-9 units to uphold a more secure environment for everyone, including patients, employees and visitors.

Hospitals and health systems are also providing additional resources and support for employees who are affected by violent incidents. And, we are working closely with state and local law enforcement to help ensure we have strong partnerships for addressing incidents and maintaining a healing environment in our facilities.

It’s important to spotlight this issue and the amazing feats our healthcare heroes take on every day to lead South Carolina to a better state of health. So, the simplest way to celebrate nurses today when you need care is to be kind. Extend that kindness to everyone in the hospital, from the security guards to food services. Every day they suit up for work, our hospital employees make a commitment to Zero Harm. Let’s make that same commitment to them.

South Carolina’s legislative session came to a chaotic close following last-minute votes on a litany of bills, including a controversial ban on gender-affirming care for minors, a monument to a Black icon of the Civil War and limits on children’s ability to access pornographic material.

All of that was overshadowed by an eleventh hour vote by Republican hardliners to kill a top priority of legislative leadership and Gov. Henry McMaster.

With just several minutes left until the 5 p.m. hard deadline May 9, the conservative South Carolina House Freedom Caucus used a basic procedural maneuver to kill a sweeping state health agency restructuring bill that had been in the works for months — leaving members of the Senate incensed.

“Play stupid games, win stupid prizes,” Freedom Caucus chairman Rep. Adam Morgan, R-Taylors, told reporters afterward.

Plenty of other things did happen on the session’s final day.

The House and Senate struck a deal to form a committee to commemorate Robert Smalls, a South Carolina congressmen and a Civil War hero, with a memorial on the Statehouse grounds. They finalized legislation to prohibit minors from accessing pornographic content online. And they passed a controversial ban on gender-affirming care for transgender teenagers that the American Civil Liberties Union has described as “harmful and unconstitutional.”

But while the 2024 session is over on paper, state lawmakers leave Columbia with numerous major priorities still unresolved and the expectation they will find themselves back in the Statehouse within a month to finish up.

A proposal to reform the way South Carolina selects judges — lawmakers’ top priority this session — remains in purgatory after the House and Senate were unable to come to an agreement by the 5 p.m. deadline.

That bill will now go to a six-member conference committee consisting of three House members and three members of the Senate to rectify the differences between the two sides.

A sweeping energy reform package to expedite the conversion of a defunct Lowcountry coal-fired power plant to natural gas will also go to a conference committee after a reluctant Senate rewrote the proposal into a nonbinding resolution supporting new energy development.

And legislation banning the use of “prohibited concepts” in public school curriculum remains unresolved nearly a full year after a conference committee was appointed to debate it — leaving the fate of some of the most consequential bills discussed this year in the hands of a small group of lawmakers.

“I’m hopeful that once people sit down in the same room at the same table, that many of those differences can be worked out,” Sen. Shane Massey, R-Edgefield, told reporters after session.

The last-minute flurry of bills — and the lengthy post-session workload remaining — comes after weeks of questionable clock management from both chambers.

For several weeks, members of the House continually adjourned early amid an impasse over the energy bill, amassing a legislative backlog dozens of bills deep entering the session’s final days. Some bills, including a fentanyl bill favored by Senate President Thomas Alexander, R-Walhalla, died on the floor without a vote despite passing out of the Senate in February 2023.

Meanwhile, the Senate dedicated several days of its schedule in the session’s final week to debating legislation on topics like barring private businesses from mandating vaccinations to legalizing medical marijuana — discussions that ultimately went nowhere.

The penultimate day of session, which ran well into the night May 8, was also marked by chaos in the lower chamber of the Statehouse.

Over several hours, the House Freedom Caucus attempted to run several nongermane policy proposals as amendments to the state budget that sapped up several hours of lawmakers’ time.

Many were doomed to fail: Morgan, the group’s chair, attempted to run an amendment to the budget banning the distribution of forms mandated by the federal government to give individuals an option to register to vote.

Fellow Freedom Caucus member Jordan Pace, R-Goose Creek, attempted an amendment that would have required South Carolina to recognize all gold and silver currency — foreign or domestic — as legal tender, despite the fact it is the federal government that decides what currency is legal and what is not.

The latter effort elicited mockery from more moderate members like Rep. Micah Caskey, R-West Columbia, who donned a tinfoil hat to deliver remarks deriding Pace’s amendment from the dais.

“Everyone should point and laugh at the (SC Freedom Caucus),” he wrote on social media after the vote.

The group found other ways to be disruptive.

Later in the day March 8, Rep. April Cromer, R-Anderson, ground debate to a halt using an obscure procedural motion that would have forced House Reading Clerk Bubba Cromer to read every word of the nearly 300-page health department restructuring bill. It was a gambit Palmetto Promise Institute analyst Felicity Ropp estimated would have theoretically taken nearly 14 hours to complete.

The Anderson Republican eventually relented after nearly an hour of inactivity on the House floor. Her caucus would find another way to stall it.

With less than an hour left in session, Beaufort Republican Sen. Tom Davis — who led the bill — Sen. Margie Bright-Matthews, D-Walterboro, and Sen. Shane Martin, R-Pauline, ran more than half-dozen amendments to the bill, including several regarding vaccines that even some of Martin’s colleagues acknowledged could jeopardize the bill’s success in the House.

“Don’t push it too far now,” Sen. Nikki Setzler, D-Columbia, warned Martin 40 minutes before the deadline.

“I’m not trying to,” Martin replied.

Except he did.

When the bill came back to the more conservative House, members of the House Freedom Caucus objected to a motion to allow the bill to be heard within 24 hours of it crossing over — effectively killing it.

The architect of the bill-killing motion, Freedom Caucus member and Campobello Republican Rep. Josiah Magnuson, said the effort was personal.

All session, he said, House leadership had refused to weigh their policies seriously. Their members had been allowed to be openly mocked by colleagues on the House floor, he said, adding that someone had set up a red-haired puppet in the House chambers wearing a tinfoil hat; Magnuson has red hair.

“We’ve had bills for some of these issues filed since the beginning of last session,” Magnuson told reporters. “Some of them from the last session after COVID. A lot of this has been needed to be done for years, and it has never gotten any kind of attention until they got desperate.”

House Speaker Murrell Smith, R-Sumter, denied mismanagement of the legislation played any part in the bill’s failure, instead blaming the House Freedom Caucus for playing political games at the close of session.

“Holding hostage bills like that only harms South Carolinians,” said Smith. “It doesn’t harm the members that they feel weren’t nice to them. It doesn’t harm the institution. It harms real South Carolinians.

“We’ve got people with drug disorders with drug addictions,” he added. “We’ve got people with mental health issues. And because someone wants to have a bill that’s not related to health care restructuring and wants those bills enough, they will hold something hostage … that’s just a poor commentary on the state of affairs currently happening right now.”

Correction: A previous version of this article stated Robert Smalls was South Carolina's first Black Congressman. It was actually Joseph Hayne Rainey, who was elected to represent South Carolina's First Congressional District in 1870.

The Republican led South Carolina General Assembly agreed on several bills they say will protect children, including restrictions on transgender healthcare, age verification requirements for pornography websites and curbs to prevent child abductions.

Before ending its final day of session Thursday, the House concurred with the Senate’s changes to the Help not Harm bill, which requires schools to proactively notify parents of their child’s perceived gender identity while preventing gender transition procedures for minors by surgery or puberty-blocking drugs.

The measure is now headed to the governor.

I’ve talked to some some local teacher groups, and they felt like that, if they were, if they did encounter this situation, their number one priority is to simply say, ‘we believed this was what was happening’ and they’re out of it. That’s all they have to,” said House Majority Leader Davey Hiott on Thursday about any potential encounters with transgender students.

Hiott said the bill was important to pass for many in the legislature. “I’ve never had a perfect bill in my 20 years here. I believe that was good enough to where a teacher said look, as long as we’re not having to call parents,” he said. Hiott led the original effort in the House to eliminate the teacher’s responsibility to contact parents.

The House agreed with the Senate’s amendment to take the energy bill off a suicide prevention measure. The legislation would require and one hour of suicide prevention training as part of continuing education requirements and licenses for therapy workers. It was one of a half dozen bills the House had attached with the energy legislation. With the energy bill removed, they also passed a bill allowing for counselors licensed in other states to work in South Carolina.

Constitutional Carry was already passed and signed into law. The General Assembly revised the measure Thursday to dismiss pending illegal handgun possession charges.

Here are a few other measures, now awaiting Gov. Henry McMaster’s signature.

AMENDING CONSTITUTION ABOUT VOTING, U.S. CITIZENS

Both chambers passed a Senate measure changing one word in the state Constitution about voter qualifications. If the governor signs this bill, it would become a ballot measure for South Carolinians to vote on before becoming law.

State Sen. Josh Kimbrall, R-Spartanburg, told The State the measure is to prevent non U.S. citizens from voting in local elections. Other jurisdictions, such as California and New York, have allowed non-citizens to vote in municipal elections and school board races.

“Certain jurisdictions and courts have found that every citizen is a floor not a ceiling, so were just saying only citizens would be able to vote,” Kimbrell said.

NO TAX ON PERIOD PRODUCTS, ANTISEMITISM DEFINED

The General Assembly defined antisemitism, and added guidance on how it aligns with discrimination laws based on the International Holocaust Remembrance Alliance.

They passed tax exemptions for golf club dues and feminine menustral products. And, with the governor’s signature, people will be able to hunt feral hogs from helicopters, under certain conditions.

Other bills passed include:

• allowing insurance providers to cover paid time off for family members
• rules governing the name, image and likeness of college athletes
• pay for inmates working outside prisons
• creating an assessment fee for private ambulance services
• allowing non S.C. residents to qualify for burial in the state’s veterans’ cemeteries
• enabling deer processor’s to recover fee for donated does
• prohibiting interference with farm animals being transported
• allowing photographs to provided for handicap parking placards

What type of tax cut to give South Carolinians and how big of a raise to give state employees are among the differences between the House and Senate budgets which will need to be reconciled in a conference committee.

House members Wednesday adopted their second version of the 2024-25 budget, pushing a $13.3 billion spending plan.

Even though both chambers have some agreements, including how much to pay teachers, differences will need to be worked out.

The two chambers agree on raising the starting teacher salary in the state to $47,000, but disagree on how much state aid to classrooms should be sent to school districts.

The House wants $229 million in state aid to classrooms, which give school district more flexibility than the Senate plan for $200 million in state aid.

Under the Senate plan, any state employee earning $50,000 or less would receive a $1,375 raise. Those earning more than $50,000 a year would receive a 2.75% pay increase.

The House plan calls for giving a $1,000 raise to any state employee earning $66,667 or less. Anyone earning more than $66,667 would receive a 1.5% raise.

For taxpayers, the House wants to stick with its plan for a property tax cut, but scaled back how large of a tax credit homeowners could expect.

The House plan now shrinks the property tax credit for owner-occupied houses from $500 million to $150 million in an effort to avoid the appearance of property taxes going up the following year.

Ways and Means staff estimates providing $150 million for property tax relief from surplus sales tax revenue would allow the relief to be in place for 10 years. The cut is smaller per year, but it’s larger over time.

About $100 million in surplus sales tax revenue is generated into the homestead exemption fund.

The homestead exemption fund was created in 2006 as part of Act 388 passed created a tax swap that increased the state sales tax in exchange for a reduction in property taxes on owner-occupied houses.

Senate budget writers want to use $100 million of the homestead exemption fund surplus to accelerate the planned income tax cut, with $500 million used for infrastructure projects in its $13.8 billion spending plan.

Gov. Henry McMaster suggested using $500 million of the $600 million to address bridge repairs in the state.

Lawmakers have less new money this year to allocate than in previous years as economic growth has returned normal levels.

How much to spend on the state’s Medicaid program also is different. The Senate only increased Medicaid spending by $56.1 million.

The House wants to spend $105.2 million more on Medicaid to keep up with the cost of rising inflation on health care costs.

Health and Human Services would not be able to do as many of its new initiatives it proposed, such as using more money for behavioral health, if the Senate figure is adopted.

“We will be able to do a few of those and the rest will have to wait until next year,” said HHS Secretary Robbie Kerr said.

In an effort to avoid the fight from last year when a budget deal was delayed over how much to spend on Clemson’s veterinary school, the Senate proposed $175 million for the vet school construction and $100 million for construction the University of South Carolina’s health campus. Those figures would allow the schools avoid borrowing money for the project.

The House, however, only proposed $47 million each for the vet school and health campus.

The amount on tuition mitigation also is different both budgets, with $57 million proposed by the House and $77 million by the Senate to give to universities on the condition they freeze tuition next year.

The House also included only set aside $1 for the required general reserve fund contribution. The Senate set aside $24 million.

Under the Department of Corrections, the Senate wanted to spend an additional $28.6 million on the state prison system which includes money for a cell phone interdiction project. The House budget only included an additional $15.3 million for the department of corrections

Senate budget writers also include $20 million for the Department of Juvenile Justice’s master facility plan, $1 million for IT application assessment, and $1 million for the agency’s cybersecurity remediation plan. The House only put $1 for each of those projects.

Only $645 million of new annual dollars is available for lawmakers to allocate and $1.06 billion of one-time money is available.

However, the Board of Economic Advisors is slated to meet on May 20 and may certify additional dollars for budget writers to use in final spending plan.

A bill that would have consolidated six South Carolina heath care agencies and was overwhelmingly passed by both chambers of the General Assembly died on the session’s final day Thursday in a procedural move by a member angry he was mocked by his colleagues.

Republican Rep. Josiah Magnuson has been against the bill from the start, saying it would create a health care czar who could take over like a dictator if there was another pandemic emergency like COVID-19.

So when the House needed unanimous support to take up the bill one last time minutes before the 5 p.m. Thursday end-of-session deadline, Magnuson objected and stood his ground even as bill sponsor Republican Sen. Tom Davis came over and held a heated conversation with other party members that had many in the chamber stopping to watch and security sergeants hovering nearby.

After the session ended, Magnuson said he was offended that he and his fellow Freedom Caucus members — roughly 15 of the most conservative House members — had been mocked all week.

Magnuson said one colleague had a puppet with bright red hair, just like Magnuson, wearing a tin hat with a Freedom Caucus sticker.

He said Davis has had nothing but insulting things to say about the group that often tries to use obstructing tactics to stall bills and social media posts that other Republicans say are ambiguous or misleading to achieve goals outside of what most Republicans in the House want.

“They have basically ridiculed me,” Magnuson said. “They have completely eradicated any credibly they have with me.”

The bill follows up last year’s breakup of the state Department of Health and Environmental Control that spun off the environmental functions.

The 2024 proposal would have created a new Executive Office of Health and Policy. It would have combined separate agencies that currently oversee South Carolina’s Medicaid program, help for older people and those with mental health problems, public health and drug and alcohol abuse programs. The consolidated agency would have come under the governor’s cabinet.

Republican Gov. Henry McMaster supported the bill in his State of the State speech. It was a pet project of Republican Senate Finance Committee Chairman Harvey Peeler and backed by Republican House Speaker Murrell Smith It passed the Senate on a 44-1 vote and the House on a 98-15 vote.

A stunned Davis stormed back in the chamber after the gavel fell and told Peeler what happened. Staffers in both chambers shook their heads.

“I’m interested in delivering good health care options for the people of South Carolina,” Davis said. “And we had some people over in the House today that failed the people of South Carolina over petty political differences.”

The bill had a tough slog at times. More conservative senators tried to tack proposals on that would prevent businesses from requiring employees to get vaccines that had not been approved by the federal government — a holdover complaint from the COVID-19 pandemic.

Others didn’t like their interpretation that the new director of the bigger health care agency could get nearly unlimited powers to quarantine, require vaccines or arrest people who didn’t follow orders in a health care emergency. Supporters of the bill said that couldn’t happen.

The death of the health care bill was considered a win by the Freedom Caucus, which often feels shut out of the best committee assignments and that their ideas get no traction in committee or the House floor.

Caucus Chairman Republican Rep. Adam Morgan said it was a bad bill from the start.

“Sometimes your bills die,” Morgan said. “You play stupid games, win stupid prizes.”

Smith said this kind of move by the Freedom Caucus doesn’t help their cause in a chamber where almost all progress comes from working together. He said the bill will continue to be a priority and that the General Assembly returns sooner than some might realize.

“It will be a six-month delay, but I don’t think that disrupts anything we are doing,” Smith said.

Despite broad efforts since 2009 to increase the availability of health insurance and access to health care for underserved populations, low-income people are remaining sicker than higher-income people and that health inequity gap continues to grow. That’s according to José Escarce, MD, PhD, the guest speaker at the April 2 annual Leonard Davis Institute of Health Economics (LDI) Samuel P. Martin III Memorial Lecture.

A Penn alumnus, Escarce’s presentation was based on his study entitled, “Income-Related Inequity in Health Care Delivery: Concept, Measurement, and Recent Trends Among Working-Age Americans.” His Martin Lecture was simultaneously the second-day event in the four-day Penn Medicine Health Equity Week Conference, an annual event designed to facilitate discussions focused on advancing health equity. The LDI lecture was co-hosted by the Penn Division of General Internal Medicine and the National Clinician Scholars Program.

Denial of Care

“Disparity in health is increasing dramatically over a really brief period of time,” said Escarce, a Professor of Medicine in the David Geffen School of Medicine at UCLA, a Professor of Health Policy and Management in the UCLA Fielding School of Public Health, and a Senior Natural Scientist at RAND. “Why is this so? Well, the quality of insurance likely matters. Medicaid may fail to provide adequate access to costly services. The spread of Medicaid managed care in particular. Well over 70% or 80% of patients on Medicaid are in Medicaid managed care, a program that is notorious for denying access to expensive things. In fact, a recent Government Accountability Office (GAO) report explained how states have not implemented systems to monitor denials of care by Medicaid managed care organizations, whereas the federal government has done that for Medicare managed care organizations.”

“Additionally, there’s the spread of high deductible health plans, which are slightly more common among low-income people and are fighting against the reduction in health status inequity,” Escarce continued. “Beyond insurance it’s also about the social determinants — not of health but of health care. There are so many sociological barriers to getting health care, and those aren’t going to go away because you get people insurance. It’s also worth noting that the dramatic decline in health among low-income Americans, relative to their more affluent peers, speaks to the multifaceted crises that these Americans face, like in the labor market in earnings and stagnant wages, in health behaviors and other negative factors that are playing out in their health.”

Income Inequality Impact

“There’s also the effect of growth in income inequality which can worsen inequity in health care,” said Escarce. “Income inequality has grown in the United States over this period of time and is working against efforts to achieve reductions in health care inequity.”

“Focusing on Medicare expenditures, the 2019 observed concentration index (of our study) would imply that the high-income individuals would get $5,578 per person, and low-income people would get $5,468 per person,” Escarce said. “But if you look at the adjusted index, which is the one that accounts for health status, high-income individuals should get $4,584 per person, and the low-income people should get $6,462 per person. The difference between what they would get in this situation is almost $1,000. So, these small inequity indices translate to huge differences in the amount of care that people actually get.”

The Samuel P. Martin, III, MD Memorial Lecture series honors the legacy of a University of Pennsylvania physician and administrator who believed that American medicine had underachieved in harnessing its vast resources to serve the health care needs of the nation and who devoted his career to addressing the issue of how that could be changed.

Escarce is currently working on several projects that address socio-demographic barriers to access in managed care organizations and is the principal investigator of a program project entitled “Health Care Markets and Vulnerable Populations,” which uses the Medical Expenditure Panel Survey (MEPS) and is funded by the Agency for Healthcare Research and Quality (AHRQ). Among other issues, the program project addresses racial and ethnic differences in access to and quality of medical care.

Previous Day Health Equity Panel: Women of Color

The previous day’s Penn Medicine Health Equity Week event was a panel moderated by LDI Senior Fellow Jaya Aysola, MD, DTMH, MPH, Assistant Dean of Inclusion and Diversity and Associate Professor of Medicine and of Pediatrics at the Perelman School of Medicine. She is also the Founder and Executive Director of Penn Medicine’s Center for Health Equity Advancement (CHEA). The panelists included Penn Medicine nurses Larissa Morgan, MSN, RN-BC; Rebecca Trotta, PhD, RN; Felicia Morrison, MSN, MBA, RN; and Andrea Blount, MPH, BSN.

The panel marked the first collaboration between the Center for Health Equity Advancement and the Abramson Center for Nursing Excellence.

Entitled “The Path for Women of Color to Ascend in Health Care,” the session was focused on an underway study focused on defining the factors that impede advancement of female nurses of color to executive leadership. Launched in 2020, the pilot study’s goal is to produce recommendations to improve advancement of women of color (WOC), peer-reviewed publications on related themes, and a “playbook” for WOC advancement based on critical insights from the study’s analyses.

Over 53% of the women who held health care CEO roles had a clinical background, and 43.9% of them were nurses. However, Black, Indigenous, and People of Color who make up 23.6% of the nursing workforce account for only 19% of first- and mid-level managers, 14% of hospital board members, and 11% of executive leaders.

“The stats are clear,” said Aysola. “There is a gap that is important to highlight in terms of advancing women of color not only in our nursing workforce but all the way up into executive leadership. Nurses represent the backbone of most of our health care systems and it’s important to honor their voices as we make changes towards advancing equity.”

More than one in five Americans rely on Medicaid, which is now the nation's largest health insurer.

Worryingly, these Americans may soon lose access to certain life-saving medicines because of a well-intentioned, but poorly designed, regulatory change that federal officials seem intent on advancing.

For more than 30 years, Medicaid's "best price" rule has made a simple and reasonable demand of drugmakers: Give Medicaid your lowest price or pay Medicaid a rebate of 23.1 percent of the "average manufacturer price" that's paid by retail pharmacies and wholesalers.

Especially for expensive drugs still under patent and less likely to be available at cut-rate prices, that minimum 23.1 percent discount helps poor Americans get the medications they need at a cost that's reasonable for taxpayers.

Sure, there are some technical aspects of all the definitions and procedures associated with the current rule that keep plenty of lawyers and accountants busy. But the basic idea is clear: Drugmakers don't get to excessively profit off the Medicaid population by charging the program more than they charge any other buyer.

Even though this formula is working reasonably well, officials now want to change it.

Instead of requiring drugmakers to offer Medicaid the best price available to any other single buyer—whether it's a commercial insurer, a hospital, a drug wholesaler, or a pharmacy benefit manager (PBM)—officials want the Medicaid price to reflect all the discounts given to those other entities combined.

The net effect would be lower Medicaid drug costs. In theory, that's a good thing. Who wouldn't want Medicaid to secure a better deal for beneficiaries and taxpayers?

But in practice, the proposed rule would prove almost impossible to implement and enforce—due, in part, to ongoing obfuscation by pharmacy benefit managers.

These secretive middlemen oversee the details of prescription drug benefits for most insurance plans, including the Medicaid "managed care" plans administered by private insurers. PBMs have deliberately made the drug supply chain as opaque and complex as possible in order to protect their tens of billions in annual profits.

There is currently no system in place to track the separate entities that handle a drug as it moves through the byzantine supply chain—and therefore no way to collect data on discounts at each "stop" (pharmacy benefit managers, insurers, wholesalers) along the way from manufacturer to patients. Drug companies often aren't even aware of the contract terms between retail pharmacies and PBMs.

Simply put, the numerous hurdles PBMs have introduced into the system of drug procurement—every one of which is also a tollbooth contributing to their bottom lines—have made it challenging to collect the information Medicaid wants.

A reform proposal worthy of consideration would start by asking PBMs what they do to actually benefit the Medicaid program as a whole and patients in particular. Spoiler alert: The answer is nothing.

Instead the proposal heaps the burden of demonstrating compliance on drugmakers and creates more paperwork for federal officials, further depleting essential resources that should be going to care for Medicaid beneficiaries.

A reform proposal worthy of consideration would start by asking PBMs what they do to actually benefit the Medicaid program as a whole and patients in particular. Spoiler alert: The answer is nothing.

Instead the proposal heaps the burden of demonstrating compliance on drugmakers and creates more paperwork for federal officials, further depleting essential resources that should be going to care for Medicaid beneficiaries.

Consider ailments like sickle-cell disease. Over 93 percent of patients hospitalized with the condition are Black. Just a few months ago, two biotech companies rolled out new gene therapies for sickle cell disease.

Would biotech companies research such conditions if the proposed rule were in effect? Or would firms instead opt to develop drugs for privately insured—and thus more lucrative—patient populations instead? The answer is obvious.

Medicaid is hardly perfect. Many doctors won't accept Medicaid patients, which leads to long wait times at the providers who do participate in the program. Enrolling, and staying enrolled, forces the poorest and most vulnerable Americans to navigate a considerable amount of red tape and paperwork.

But within the program, prescription drug coverage is a bright spot. By law, virtually every FDA-approved medicine is available to Medicaid enrollees at little to no cost. And the existing "best price" rule enables Medicaid to devote just 5.6 percent of its total spending towards prescription drugs—whereas in the health care system as a whole, prescription drugs account for about 11 percent of total spending.

When there are so many broken components of our health care system, and Medicaid specifically, that deserve attention, it's bizarre that federal officials are looking to overhaul the one piece of the program that's indisputably successful. Those officials would be wise to refocus their attention on rent-seeking middlemen—before their plan wreaks unintended consequences on the most vulnerable Americans.

Almost all community health centers (95%) are reporting Medicaid disenrollment, influencing the level of care provided to individuals that rely on these locations.

Three-quarters of people who have lost Medicaid coverage are still disenrolled, a new survey of national community health centers finds. Many of these individuals are likely unable to find commercial health insurance.

A breakdown of Medicaid disenrollees from community health centers shows the widespread impact. Of the affected individuals, 32% have chronic conditions, 24% are children, 12% were adults older than 65 years of age and 12% had disabilities.

The analysis was conducted by the National Association of Community Health Centers and the George Washington University's Geiger Gibson Program in Community Health from January to February 2024.

“Health centers are sounding the alarm on unwinding with nearly a quarter of their Medicaid patients, including children and older adults, losing coverage,” said Peter Shin, Ph.D., research director of the Geiger Gibson Program, in a news release. “The reported proportion of patients who are not seeking care or continuing treatment is also substantial and highly concerning.”

During the public health emergency, Medicaid enrollment increased more than 30% to over 23 million people. States began the unwinding process April 1, 2023, and enrollment now sits at 85 million people, said Jennifer Tolbert, director of state health reform for KFF, in a recent webinar on the unwinding's impact.

Enrollment has declined in all states except Hawaii, due to a procedural pause brought on by the Maui wildfires in August, but states are at different levels of processing renewals and enrollment varies greatly.

"We find mild, but positive, correlation between the number of e14 waivers a state has adopted and enrollment decline," she explained.

These waivers can increase ex parte (automatic) renewals, help enrollees submit renewal forms, update contact information or facilitate reenrollment for people affected by procedural terminations, KFF reported. Only Florida has not utilized any waivers.

She expects the Centers for Medicare & Medicaid Services to release a timeline showing each state's progress soon, though some states likely won't be done with the unwinding process until the fall.

After two years of experimentation with addressing people’s social needs with services like food, housing, and transportation through Medicaid, the North Carolina Department of Health and Human Services (NCDHHS) is planning to expand the services statewide.

More than 288,000 services have been delivered and more than 20,000 NC Medicaid beneficiaries have enrolled across 33 predominantly rural counties in North Carolina as part of the Healthy Opportunities Pilots since the program began providing services two years ago. 

The Centers for Medicare and Medicaid Services (CMS) approved the Healthy Opportunities Pilots in 2018 as part of the state’s waiver to transition to Medicaid managed care. Also, North Carolina expanded who can get Medicaid starting Dec. 1, 2023. Enrollment has surpassed 400,000 in the expansion program’s first four months.

North Carolina says that preliminary research from the program’s independent evaluation shows the state is spending about $85 less in medical costs per Healthy Opportunities Pilots beneficiary per month. 

Those findings also show participants avoided a significant number of emergency department visits, and research shows participants have a reduced risk of food insecurity, housing instability and lack of access to transportation. Further, the findings showed that the longer a person was enrolled in the pilots the greater reduction of risk.

"The Healthy Opportunity Pilots are having a tremendous impact on the lives of thousands of people in North Carolina by removing barriers for people, particularly in rural areas, to services that are critical to whole-person health," said State Health Director and NCDHHS Chief Medical Officer Elizabeth Cuervo Tilson, M.D., M.P.H., in a statement. "This collaborative effort is also investing in the economy of our local communities, which also promotes health.”

NCDHHS used the example of one member to describe how the program works. A single mother had been staying at a local shelter with her children but needed life-saving surgery. Her children couldn’t remain in the shelter without her, which left her in an impossible position. Mom had secured an emergency housing voucher, but it wasn’t enough to cover rent in the county where she would be receiving treatment.

Through the Healthy Opportunities Pilots, her care managers were able to help her transfer her housing voucher and secure income-based housing near the hospital. They also helped her access financial support for her security deposit and utility setup fees — all services that are covered for the Healthy Opportunities Pilots participants.

Now, mom is able to focus on her health, schedule needed medical care, and keep her family together under one roof with help from her friends and the Healthy Opportunities Pilots.

Encouraged by early success of the program, NCDHHS renewed a federal 1115 waiver in October 2023, which included a request to allow expansion of Healthy Opportunities services statewide. NCDHHS anticipates working in collaboration with federal partners to expand the program and ensure more people in North Carolina receive these services.

Right now, the Healthy Opportunities Pilots services are available to qualifying NC Medicaid Managed Care Standard Plan beneficiaries who live in a Pilot region and meet at least one qualifying physical or behavioral health criteria and one qualifying social risk factor. The program looks forward to further extending access to these services later this year for Medicaid Direct beneficiaries who are eligible for tailored care management in the Pilot regions.