Keep an eye on Medicaid reform. Few issues have the potential to affect this state more profoundly than the massive overhaul of the program that insures 850,000 poor, disabled and elderly South Carolinians.

That's about one out of every five South Carolinians. The $4.2 billion Medicaid program pays for about half the births and three of four nursing home beds in the state. There's no room for failure in a reform plan that could involve so many of the state's most needy residents.

The partial privatization plan envisioned by Gov. Mark Sanford and the state Health and Human Services Department would involve the vast majority of Medicaid recipients -- as many as 700,000. The plan would give Medicaid recipients personal health accounts to pay for their medical expenses. Patients could use the account to buy medical coverage that could range from a high-deductible plan to a full-service program. Any money left over could be used to pay deductibles with a debit card at the hospital, doctor's office or pharmacy.

Asked if he was certain that the reform plan would both contain health-care costs and improve health-care services for Medicaid recipients, Gov. Mark Sanford recently told Greenville News editors: "If I didn't believe that, I wouldn't be doing it."

The governor's solid commitment to improving health-care services for the poor is important because critics believe the health accounts would buy only limited health coverage and leave little money for paying deductibles and co-pays. Advocates for the poor are concerned that the reform plan might, at best, contain costs but without improving health-care services.

A large-scale Medicaid reform plan in Tennessee 10 years ago proved disastrous as 1 million Medicaid recipients were forced into managed care. Fraud was rampant and Medicaid reimbursements were so low that many doctors refused Medicaid patients. Sanford says his plan, which must first be approved by the federal government, is different from the one in Tennessee, although certainly privately managed care would be one option for Medicaid recipients.

State officials believe that personal accounts -- because they provide a limited amount of money -- will encourage Medicaid recipients to make prudent choices in buying coverage and choosing doctors and services while providing an incentive to maintain good health and limit health-care spending. Medicaid would no longer offer open-ended coverage, and that would force recipients to make better decisions. Medicaid recipients would have a primary care provider and thus would be less inclined to use the emergency room and would be more diligent in practicing good preventive care.