The "Nikki detente" talks

The new leader of the South Carolina Senate Democratic Caucus, Nikki Setzler, has a reputation as a respected problem-solver who works well across party lines.  This Wednesday he will be having breakfast with the state’s Republican Governor, Nikki Haley (no relationJ), for a bipartisan discussion on improving the funding formula for K-12 public education.

This overture by the Governor hopefully signals a better working relationship not only between Democratic legislators and the Governor but also between her and legislators in her own party. 

If the two Nikki’s develop a good working relationship on the issue of education funding, hopefully that good will can spread to other important issues for the state’s small businesses.

Senator Setzler laid out two laid of these issues in an opinion editorial this past Friday in The State.

Our state’s economy is improving, but it still lags the national economy. Our state must continue to recruit large employers, but we must have an equal focus on small businesses. The state’s Department of Commerce needs a small-business division charged with recruiting and supporting small businesses, which create the majority of the jobs in South Carolina. Often, it’s small businesses that are on the cutting edge of technology, and South Carolina needs to support these entrepreneurs.
 

South Carolina needs to ensure access to medical care for its residents. It’s a way to invest in the wellbeing of our people and maintain a healthy and vibrant workforce. The U.S. Supreme Court has spoken: The Affordable Care Act is the law of the land. Washington politics should not be our politics. As legislators, we need to provide a better quality of life for our residents. By expanding our state’s Medicaid program to cover the poorest of the poor, we can do just that.

Having the Department of Commerce put boots on the ground to help local communities grow small businesses has been a long time goal of the S.C. Small Business Chamber.  Expanding Medicaid will benefit small businesses by creating a healthier workforce and making health insurance more affordable for business owners.

So good luck to Senator Setzler this week.  His breakfast with the Governor is about more than education—it’s about making South Carolina more small business friendly.

Glimmer of hope for Medicaid expansion

The South Carolina House and Senate started the new legislative session yesterday.  For those who have not experienced the occasion it’s similar to the first day back at school in the fall.  Everybody is friendly and happy to see each other.  

All were in a positive mood except for the small crowd in front of the State House in the morning protesting Obamacare and calling for state legislation to nullify the law they claim allows the federal government’s “take-over” of healthcare.  The protesters included several on motorized power scooters that they probably purchased with the help of government insurance called Medicare.  The irony would be laughable if it wasn’t reminiscent of the very first time the nation heard the phrase, “Keep your government hands off my Medicare”.  For the record, I was at that former Congressman Bob Inglis town hall meeting in Simpsonville, SC, when that statement heard around the world was made.

The Obamacare-protesters would have really hooted and hollered had they heard what a reliable source told me yesterday.  The GOP House leadership would like to find a way to expand the state’s Medicaid program as allowed under Obamacare according to my source. 

While Governor Nikki Haley and her HHS director Tony Keck have been telling the public that we can’t afford to expand healthcare services to hundreds of thousands of uninsured low-income South Carolinians, Republican leaders at least in the House might be seeing the issue through less partisan eyes.  The benefits of a Medicaid expansion are improving the health of our citizens thus creating a more productive workforce, making health insurance more affordable for small businesses, protecting our hospitals from revenue loss and adding tens of thousands of new jobs to boost the state’s economy.  

If my source is correct, the real battle in the State House this year over Medicaid expansion might not be so much between different factions in the Legislature but between the Governor and the General Assembly. 

 

 

The Medicaid expansion debate heats up

The advocates of expanding Medicaid in South Carolina were out in force last night at the USC School of Law auditorium.  Hundreds of people turned out to hear presentations by three supporters of the expansion and one opponent, Tony Keck the Director of the SC Department of Health and Human Services.

In his remarks, Mr. Keck chastised the first speaker for barely mentioning health while focusing on the economic reasons for providing Medicaid to South Carolinians up to 138% of the federal poverty level.  His position and that of his boss, Governor Nikki Haley, is that spending money to expand Medicaid to hundreds of thousands of uninsured low income citizens is not the best way to improve their health. 

One of the two slides Mr. Keck showed was the underpinning of this argument.  The slide of a map showed federal data on health outcomes for Medicaid recipients in the state.  Those with Medicaid in the I-95 corridor of shame had far more health problems than Medicaid recipients outside of that area.  This demonstrated, according to Mr. Keck, that government health insurance was not a good determinant of health outcomes.  Better education, jobs and personal decisions along with genetics were more important to better health than simply having health insurance.

When I was recognized to speak, I pointed out that the map he was of present Medicaid recipients but that these were not the people we were actually talking about.  I wanted to see a map of the uninsured South Carolinians who would be eligible for Medicaid under the expansion and how their health outcomes compared with today’s Medicaid recipients.  I predicted that we’d see a big difference between the two groups with those with Medicaid having better health.

Mr. Keck responded with more of the same concerns that expanding Medicaid was not going to be successful in improving health.  But I was able to get in one last question.  Did he think that there would be a different health outcome for a person at 50 percent of the federal poverty level with a child who has Medicaid under our law compared to a person at 60% of the federal poverty level who does not have Medicaid today. 

Mr. Keck responded that of course the person would be better off with Medicaid than without it.  “But at what cost?" he added.

Cost?  Wasn’t this debate supposed to be about health?  When the proponents cite the economic benefits, they get criticized.  But when the opponents of expansion agree that having Medicaid will yield to better health outcomes than not having it, then they evoke “COST”. 

This is going to be an interesting legislative session.

Protecting business checking accounts after hacking

Frank Knapp appeared on SC ETV’s Connections this past Friday evening.  Host P.A. Bennett talked with Frank about the dangers to businesses as a result of the hacking of tax data from the S.C. Department of Revenue.  Also appearing on the show was Carri Grube Lybarker of the S.C. Dept. of Consumer Affairs, FBI Special Agent Chris McLure and financial empowerment coach Karen Jenkins.  Click here to watch the show entitled “Protecting Your ID”.  Frank’s segment starts 13:55 minutes into the program.
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The total potential consequences of the hacking theft of South Carolina tax information on 700,000 businesses is gradually getting through to the public and, for that matter, the Administration of Governor Nikki Haley. 

Haley first characterized the threat to businesses as no more than the risk we have when we “give a check to your grocery store.”  She asserted that the business information the hackers stole somehow wasn’t a secret at all.  “They got what was already public.”

But to make businesses feel more secure her office offered a state-funded business credit monitoring protection from Experian and then later much the same service at no cost from Dunn & Bradstreet.

But the business threat is much more serious than simply identity theft which results in results in destroyed credit.  The actual money a business has in a checking account is at risk.

Two weeks after the hacking of the Department of Revenue data, S.C. Treasurer Curtis Loftis brought to Columbia security expert Chris Swecker, the former head of the Charlotte office of the FBI and Bank of America’s corporate security.  Swecker told a symposium on the issue that up to $360 million could be swiped from individual and business bank accounts because of the data breach.

From the very beginning that the public was made aware of this failure to protect taxpayer information I have been preaching that businesses should at a minimum close their checking accounts and re-open them with new account numbers.  At least we can make one part of the information stolen obsolete so as to protect against the thieves fraudulently pulling money directly out of checking accounts.

However there is a much more insidious threat—corporate account takeover.  Swecker pointed out that the thieves can use the business tax information to target high-income businesses.

Corporate account takeover is real, costly and not hard to do when the thieves have all a business’s tax information.  The thieves can target the businesses most likely to have significant cash from time to time in their corporate checking accounts.  Business websites will give all the information the thieves will need to send malware to office computers.  Just as someone at the Department of Revenue downloaded malware that let to this debacle, someone at the business will unknowingly do the same.

Once in the door, the malware will find the computer used for online banking and it’s over.  The thieves will know when is the right time for them to strike.  The money will be gone and the financial institution cannot be held accountable.

There are some solutions to this problem.  One is inconvenient and the other will cost.  I’ll discuss them tomorrow.

 

Missed opportunity to fight obesity

The first negative consequence of South Carolina Governor Nikki Haley joining fifteen other states in opting out of a state-run health insurance exchange under Obamacare has surfaced.

Haley’s Department of Health and Environmental Control has made fighting obesity in South Carolina a number one priority.  The director of the agency has formed a state obesity council to pull together all the organizations around the state working on the issue to learn from each other and better coordinate efforts.

One of the efforts that will be missing is forcing health insurance carriers to also help solve the problem with programs imbedded in their policies.  According to Dan Mendelson, CEO of Avalere health, that is what a state-run insurance exchange could have required in states with obesity problems.

If that state were running its exchange, it could say to insurers 'We want to make sure you have a plan that encourages diet and exercise.' Medicaid frequently does this. The program is always tailored to the specific needs of the state.  By ceding the prerogative on their exchanges, states lose the opportunity to make those choices.

Of course even if South Carolina did run the exchange, it is probably unlikely that it would have dictated anything to the insurance carriers given its past reluctance to regulate anything about the insurance industry.

The sad case of Medicaid expansion

At the recent Republican National Convention South Carolina Governor Nikki Haley took the stage.  “Sadly, the hardest part of my job continues to be this federal government, this administration and this president,” she said.

But a story in today’s Charleston Post & Courier clearly shows that the hardest part of the Governor’s job is convincing state legislators not to do what is in the best interest of South Carolina. 

According to the story Haley and Tony Keck, who heads the state’s Department of Health and Human Services (SCDHHS), have been meeting and talking with legislators to convince them to vote against expanding Medicaid in the state to cover up to 600,000 uninsured South Carolinians. 

Under Obamacare the feds would pick up all the cost for the expansion for the first three years and 90% after that so the uninsured at or below 138% of the federal poverty level could get the healthcare they desperately need.  Small businesses employing these working poor would benefit from healthier workers that would no longer need covering under employer healthcare plans.   Premiums for everyone would be helped by eliminating the hidden premium tax we all pay for the uninsured.  Healthcare providers would benefit from the increased revenue.  And the economic boost to the whole state’s economy would be enormous. 

But Haley wants the state to reject the $13 billion in federal money over the next six years because, she says, it would hurt the state in the long run. 

Haley complains that the state can’t afford the expansion.  She cites a highly criticized study paid for by Keck’s agency.  In analyzing this report John Ruoff of The Ruoff Group concludes, “As the General Assembly explores a Medicaid expansion, it should do so with realistic numbers based on empirical research and taking into account all costs and savings directly attributable to an expansion and not just SCDHHS costs and savings. To date, SCDHHS has failed to provide estimates of those other savings.”

The Haley administration also contends that the Medicaid program doesn’t provide the most healthcare for the lowest cost.  But instead of crafting a new approach and asking the feds for waivers to implement a more “cost effective” Medicaid program as it claims it wants, Haley and Keck would rather do the political work of convincing the legislature and public that an expansion is not good for the state. 

Sadly for South Carolinians, the hardest part of our job is seeing the health of our citizens and economy suffer at the hands of partisans looking to make national names for themselves.

 

Expanding healthcare to more childen....finally!

Congratulation to South Carolina Governor Nikki Haley and state Health and Human Services Director Tony Keck.  Their proposal to add an additional $29 million in the Medicaid budget for children’s healthcare appears to be a done deal both in the House and Senate.  This is a dramatic turnaround from the Mark Sanford administration.

Back in 2007 the South Carolina Small Business Chamber, S.C. Appleseed Legal Justice Center, S.C. Fair Share and AARP-SC were fighting to increase the cigarette tax in an effort to generate funding for a program to help make health insurance more affordable for small businesses and to expand the number of children eligible for Medicaid from those in families of  up to 150% of poverty to up to 200% of poverty.  The latter proposal survived and the General Assembly put about $29 million in the budget to provide healthcare services for an additional 70,000 to 100,000 children.

Governor Sanford then vetoed that part of the budget but we were successful in having that veto overridden.  The story should have ended there…but it didn’t.

The Sanford administration and his HHS director actively worked against adding these children to the Medicaid program by refusing obvious measure to let parents know about the program and throwing every roadblock they could in front of parents and organizations who tried to have the newly eligible children enrolled in the program.  Who knows where the millions set aside for the program went but it certainly wasn’t used as intended by the Legislature.

For 5 years these children went without the Medicaid for which by state law they were legally eligible. For 5 years the uncompensated healthcare these children did receive helped push insurance premiums up on individuals and small businesses.  For 5 years the working parents of these children were less productive on the job because of sick children whose illnesses could have been preventive with proper healthcare.  All of this because Governor Sanford and his Director of HHS knew better that the General Assembly and caring more about shrinking government instead of the health of our needy children and health insurance costs for the rest of us.

But while Governor Haley, Tony Keck and the Legislature appear to be all on board with funding and implementing this Medicaid expansion, they should drop their rhetoric that they are doing it because of the new federal health care law, the Affordable Care Act. 

There was no “ObamaCare” back in 2007.  This Medicaid expansion program for children was passed by a Republican House and Senate.  It is the law.  State officials need to stop blaming President Obama for a worthwhile healthcare program that we worked for and our South Carolina Legislature passed 5 years ago. 

The Governor's new job

For the second Sunday in a row, The State has given us first hand information regarding Governor Nikki Haley and her administration.  As a result of last week’s story, I formerly requested that the Governor and her economic development team meet with the South Carolina Small Business Chamber’s Board of Directors to discuss developing an agenda for promoting small business economic development.  (I have not received a response from the Governor’s Office as of yesterday.)

Jeff Wilkinson’s story yesterday revealed even more reason for the Small Business Chamber’s Board to meet with the Governor.

The story is about how South Carolina secured a commitment from Continental Tire to build a $500 million manufacturing plant here with an anticipated 1600 workers.   A $31 million infrastructure grant was a key to the deal.  Governor Haley told the reporter that grants for infrastructure were “a function of government”.  Surely this means that she supports the President’s call to create a national infrastructure bank in his American Jobs Act.

But there was even more interesting information about the Governor in the story.

“Haley said she gave company officials her cell phone number, telling them, ‘When you move to this state, I will become an employee of your company. I’m going to do everything I can to make sure you are successful.’”

The Governor also told the reporter, “I know if I can make sure those companies have cash flow and profit margins, they are going to hire more of our people. That is what this is all about: Jobs.”

These comments obviously raise some questions.

Does the Governor see her role as being the “employee” of big corporations?  What about the real job creators, small businesses, that she and every other politician like to pledge their loyalty?  When the interests of big corporations clash with the interests of small business, whose side will she be on?  And what do small businesses have to do for the Governor to say that she is our employee (to say nothing about the rest of our citizenry)?  What is the Governor doing to make sure that the tens of thousands of small businesses in our state have cash flow and profit margins? 

Final question—can I get the Governor’s cell phone number?

Letter to Governor Nikki Haley

October 10, 2011

The Honorable Nikki Haley

Governor

State House

Columbia, SC

Dear Governor Haley,

In an interview reported in The State yesterday you indicated your desire to revise the South Carolina tax code.  Specifically you mentioned that one of the goals of this process would be to phase out the corporate income tax in an effort to encourage companies to locate in our state.

As you know, the vast majority of small businesses in South Carolina are not organized for tax purposes as C-Corporations.  Consequently, the Mom and Pop businesses you are quoted as saying we “need to be helping” will not be directly helped by reducing or eliminating the corporate income tax.

We at the South Carolina Small Business Chamber of Commerce would like to work with you in developing a small business agenda to promote economic growth and job creation.  Our Board of Directors would like to meet you and your economic development team to discuss this issue. 

Given that the legislative session will start in just three months, a prompt reply to our request for a meeting is essential.

Sincerely,

Frank Knapp, Jr.
President & CEO

Message to feds--ball's in your court

So it’s unofficially official.

South Carolina will have a health insurance exchange run by the federal government starting January 2014. Yesterday, Governor Haley’s administration re-confirmed that our state would not ask the U.S. Department of Health and Human Services (HHS) for additional money to plan for setting up an insurance exchange. That is the path all other states intending to operate their own exchanges are taking.

While the official word on letting the feds do it has not been made, it was very clear at the 3+ hour meeting of Gov. Haley’s SC Health Planning Committee yesterday that there was no interest in even discussing an exchange. The Gov. set up the Committee by Executive Order back in March in response to legislation introduced in the House to create a South Carolina exchange (that bill is stalled in committee). A $1 million federal grant from HHS for the purpose of studying the feasibility of a state exchange is paying for the work of the Committee.

The word “exchange” was ever barely mentioned during yesterday’s meeting and only probably twice in passing. It was clear that the mission of the Committee was not to decide if our state should set up an exchange but to discuss ways of reducing health care costs. Of course this is an excellent topic but hardly what the feds gave us the grant to do.

So what started out as Governor Haley’s insistence that South Carolina would figure out how to get out from under the Affordable Care Act by setting up our own version of an exchange (to meet President Obama’s criteria), now looks like a decision to just let the feds do it. The eventual official announcement will be played down and the rational will be why spend the time and effort with long-term financial responsibility to do something that the feds are willing to do for us for free.

That is a very logical, practical and honorable decision to make—and the right decision for us, especially for the health care consumers.

But it also means that South Carolina is ending its pipedream of setting itself free of the Affordable Care Act, which will not be ruled unconstitutional by the Courts.

Amazon’s tantrum

Last week legislation was introduced in both the South Carolina House and Senate to exempt Amazon.com from collecting sales tax on sales to South Carolina residents from its proposed distribution center in Lexington County. The bills have an uphill fight.

My earlier blogs lay out the arguments against the Amazon deal:
April 5th--Selling Small Businesses down the Amazon
April 7th--Amazon.com: The bigger picture
April 8th--Amazon.com’s business plan revealed

Business organizations like The S. C. Small Business Chamber, the S.C. Chamber and the newly formed S.C. Alliance for Main Street Fairness are opposing the Amazon.com sales tax exemption for its obvious unfairness to all brick-and-mortar and on-line stores in the state. Tea Party groups across the state have registered their opposition to the deal directly to Governor Nikki Haley in a private meeting encouraging her to veto a bill if it reaches her desk (something she has said that she won’t do). Competing TV and radio commercials are airing statewide encouraging the public to contact legislators to support and oppose the Amazon sales tax deal.

Realizing that South Carolina was not going to be a pushover like all the other state’s it has bullied into getting its way over sales tax, Amazon.com threw a tantrum announcing it had stopped the hiring of 11 management positions for the Lexington County center.

Obviously this is a childish ploy to influence the legislative process. But if it should somehow be successful, Amazon.com will have shown small businesses a new lobbying tactic—stop hiring any new employees until we get what we want from the General Assembly. With over 100,000 small businesses in South Carolina can you imagine how effective this collective “holding our breath” can be?

But back to Amazon’s media effort. Their latest postcard to Lexington County residents (from the company’s new front group—Save Our Lexington Jobs) plays off the Wal-Mart advertising campaign by saying “building the economy in Lexington County has fallen victim to a Wal-Mart ROLLBACK.”

However, the word “rollback” is not what most small businesses across the state are interested in. They want to know if Amazon.com will blackmail our Legislature to ROLLOVER.

SC Government and Big Businesses Already Benefiting from “Obamacare”

The Florida judge's ruling Monday against the Affordable Care Act (ACA) is just one more step along the path to a final decision by the U.S. Supreme Court in a few years.  Now two Federal Judges have deemed the individual mandate to be unconstitutional and two have not found it to be so.  Of note is that no judge has found the expansion of Medicaid in the ACA to be unconstitutional.

But until the Supremes rule differently, the ACA is the law of the land and it is doing exactly what it was intended to do--make health insurance more affordable even for those who want to repeal it. 

Here is a perfect example.

Leaders of South Carolina’s state government and our state’s big businesses might continue to oppose health care reform but that’s not stopping them from taking money from the new program.

The ACA created the Early Retiree Reinsurance Program (ERRP) to help employers with the cost of paying for health care of their retired employees not yet eligible for Medicare.

And guess what anti-reform SC business was the first to tap funds under this ACA program? Blue Cross Blue Shield of SC.

Joining BCBS in using the ACA to make health care more affordable is the SC Budget and Control Board, Employee Insurance Program. The Budget and Control Board is chaired by ACA-hater Governor Nikki Haley.  Therest of the Board consists of other Republican leaders sworn to repeal the ACA.

Is this irony or hypocrisy? You decide.

For a complete list of SC local governments and businesses also receiving ACA funding under the ERRP, click here.