Committee Starts Task of Applying Federal Health Care Laws to SC


COLUMBIA, S.C. –A South Carolina panel is beginning the arduous task of figuring out how to best configure the state’s health care system under the overhauled federal health care laws.

The same day the U.S. Department of Health and Human Services (USHHS) released 244 pages of new rules for states implementing the federal Affordable Care Act, the S.C. Health Planning Committee began holding its initial subcommittee meetings in Columbia.

By Oct. 28 the committee, charged with looking at the many ways South Carolina can implement the federal Affordable Care Act and funded by a $1 million federal grant, will recommend a plan to the Board of Health and Environmental Control for their changes and final approval.

If the committee finds that implementing a state-run health insurance exchange is not feasible for South Carolina, the federal government will put an exchange in place for the state instead.

The Affordable Care Act requires states to have an exchange in place by the start of 2014, with federally approved plans due at the start of 2013.

A health insurance exchange is an online marketplace for individuals and small businesses to compare and shop for insurance plans.

The exchanges are intended to increase competition among private health insurance providers to bring down the cost, and better inform consumers of all of their options and what each plan means.

The politically charged provision is that exchanges will also let those who are not offered insurance through their employers see if they qualify for Medicaid, and let others know how much of a federal tax credit they can get for to bring down premiums of plans found on the exchange.

In a Monday news release, USHHS touted their new guidelines for building an insurance exchange as giving states tools and flexibility to decide what works best for them. The proposed rules set standards for establishing an exchange and evaluating insurance plans to participate in the exchange. They also let states choose if their exchanges should be local, regional or operated by a non-profit organization and whether to partner with the federal government to split the work.

But many Republican governors say there is little flexibility, and members of the S.C. Health Planning Committee, like Tony Keck, the Director of S.C. Health and Human Services, said that planning to comply with federal rules is like trying to hit a moving target.

“The federal government is trying to fly this plane as they’re building it,” Keck said. “There is a lot in the health care reform law that is basically just left for rules and regulations, meaning it’s not specified in the law but the various federal departments have to put out tens of thousands of rules of how this is going to work. Today even though the states are supposed to be half way through trying to decide whether or not to run a health insurance exchange, today was the first day we got their proposed regulations the federal government wants us to operate under.”  

Keck said the endeavor is the biggest undertaking any state has taken on since the start of Medicaid and Medicare in the 1960s.

As chairman of the Competitiveness and Transparency subcommittee, Keck encouraged the members to self-educate on the new regulations and exchange options, from a smaller operations like Utah’s exchange, to larger ones like in Massachusetts.

For the committee, the bottom line is what the risks of launching a health exchange would be for South Carolina, and whether the state could do a better job than the federal government at lowering health care costs, increasing quality of care and disseminating clear information on health plans to citizens.

Keck instructed his committee to move forward with planning and weigh the costs and benefits of a South Carolina-run insurance exchange as if the federal law’s execution was a certainty.

However, South Carolina is one of 26 states that sued the federal government to overturn the Affordable Care Act, but as long as the law stands the state must move forward with planning, or risk the federal government implementing an exchange.

Gov. Nikki Haley has voiced her desire to get the state exempt from the insurance exchange stipulations of the Affordable Care Act, but has also said that if the state does decide to implement an exchange, it will not take federal funding for it. That means that either private insurance providers, employers or individuals will likely foot the bill.

Keck said that since employers and individuals will be getting the benefits of lower premiums that should contribute to the system, but that there are exchange models where insurance providers pay since they have the benefit of getting the facts of their benefit plans out to the public.

However, the prospect of private insurers funding an exchange has raised concerns about transparency, since the exchange is supposed to entice providers to be more competitive.

Many of the Affordable Care Act’s policies are already in place, including rules for insurance companies rescinding coverage, protecting children with pre-existing conditions from being turned down, extending young adult coverage and giving small businesses tax credits for insuring employees.

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