COLUMBIA--A House panel begins work on changing the state's Medicaid system today, including any plan to raise cigarette taxes to fund the Health and Human Services Department.

All cigarette tax increase proposals will be routed to the Medicaid Reform Ad Hoc Subcommittee, said House Majority Leader Rick Quinn. And the proposals aren't getting a warm reception from Quinn, the Columbia Republican who chairs the panel.

"I'm opposed to the tax increase," Quinn said.

Medicaid is a federal government program, partly paid for with state money, that covers medical costs for the poor, elderly and disabled.

Fodder for change in the Medicaid program will come from legislators and two Legislative Audit Council reports, Quinn said.

The audits released last month found program shortcomings.

One audit suggested charging an enrollment fee and improving debt collection. The other urged creating a new Cabinet agency to oversee all health and human services agencies.

A push to reform Medicaid comes as Health and Human Services faces another budget crunch.

The House Ways and Means Committee passed a state budget last week that doesn't include a tobacco tax. Still, tobacco tax proponents say Medicaid needs a stable source of funding and legislation proposing a 53 cent-a-pack increase now being considered in the House and Senate. That would lift the state's current 7 cent-per-pack levy to the national average, generating about $97 million for Medicaid programs.

Inflation, use of state reserves and reliance on other one-time funding sources in the current Medicaid budget prompted Health and Human Services to seek $192 million more from the Legislature as it began writing the budget that takes effect July 1.

With Medicaid spending increases, a tobacco tax increase alone shields those programs from shortfalls for only a year, Quinn said.

A panel Republican Gov. Mark Sanford assembled to study health care issues last week endorsed a cigarette tax increase to cover Medicaid costs.

Sanford, who is reviewing the panel's recommendations, was not immediately available for comment.

In speeches, Sanford has held that any increase in the cigarette tax would have to be tied to reforms at the Health and Human Services Department and other agencies handling Medicaid money. Any tobacco tax increase would have to be tied to a tax decrease, such as an income tax reduction he favors, Sanford has said.

A smaller tobacco tax increase "has got good potential," said Rep. Rex Rice, an Easley Republican on the committee.