Gov. Mark Sanford's Medicaid waiver proposal, "South Carolina Healthy Connections," is a step in the right direction towards damming the floodwaters of an ever-increasing Medicaid budget, while also ensuring a higher standard of care for the state's Medicaid beneficiaries. Left unchecked, the Medicaid budget will soon outpace the funding necessary to fulfill the requirements of the Education Finance Act. In a state that is trailing the nation in education, having to choose between funding Medicaid or funding education would be disastrous.

The current Medicaid system operates under an inefficient fee-for-service (FFS) model. This outdated model has long been abandoned by the private commercial market because, over time, unchecked increases in utilization and lack of management or oversight forced employers to drop coverage, or increase co-payments and deductibles, to a level where enrollees couldn't afford to purchase coverage, much less pay out-of-pocket expenses. The private market reacted, and continues to react, to the faults of the FFS model, and through self-regulation developed cost efficient products, such as managed care, implemented over a decade ago, and, most recently, by offering health savings accounts and disease management.

In order for the state Medicaid program to provide the highest quality of care at the lowest cost, managed care, as well as, disease management practices must be implemented, as they have been in the private sector. Medicaid recipients must become consumers and be able to make informed decisions about their own health care; much like other South Carolinians who pay insurance premiums each month, and are required to make co-pays for visits to providers. This waiver will expose the South Carolina Medicaid system to the nature of the free market, eliminating waste and fraud; which, not only allows for the system's survival, but also positions the state as a leader in the nationwide effort to reform state Medicaid programs.

The proposed Medicaid waiver gives recipients a greater responsibility for their own health care. Recipients immediately become consumers by having choices, by having a say in what their future health coverage will entail. They will be able to choose between a health savings account, a Medicaid HMO or a provider-sponsored network. This ability to make choices gives enrollees ownership of their care and engages them in decision-making. Under the current one-size-fits-all model of government, there is no incentive to minimize costs by practicing preventive care or declining unnecessary medical testing. The average recipient does not recognize the financial consequences of an emergency room visit, versus a visit to a physician's office, because they are not responsible for picking up any portion of the tab.

More problematic is the lack of management of the care received, resulting in many enrollees bouncing from one provider to another. Not only is this costly to the state, it is also potentially dangerous for the recipient. Furthermore, Medicaid recipients can, and have, become blank checks for unscrupulous providers. If additional tests are run, and more procedures are administered, Medicaid simply pays out more money. This type of waste is not confined to South Carolina. A recent New York Times article highlighted the potential for waste and fraud in "unmanaged" government Medicaid programs in New York, as well as other states. There is no incentive for quality, cost-efficient treatment because that would mean less money for the provider. If recipients are responsible for even a meager portion of their care, they will be able to better evaluate both the cost and necessity of testing and procedures, as well as, the quality of care given.

The reality of the situation is -- if the system is not reformed now, taxpayers will continue to dig deeper into their pockets in order to finance Medicaid funding, or, suffer the reduction in other public services, such as education or law enforcement; both of which would be unacceptable. Medicaid is a necessity, in this state as much as any other, but it must be able to provide quality health care for poverty stricken citizens, comparable to the care given to other citizens in South Carolina. With this waiver, the government will fulfill its duty of providing needy citizens with the same choices that other South Carolinians have the ability to pay for; health savings accounts, health maintenance organizations or Medicaid home networks, as well as, co-payments for certain visits.