CHARLESTON — Gov. Mark Sanford’s plan for changing the state’s Medicaid system was lauded Friday by like-minded friends at a federal hearing here that one critic called “a sham.”

U.S. Sen. Tom Coburn, R-Okla., presided over the two-hour proceeding at the College of Charleston on behalf of the U.S. Senate Committee on Homeland Security and Governmental Affairs. Coburn is chairman of the subcommittee on federal financial management, government information and international security.

Coburn, himself a physician, said Friday’s affair was under his subcommittee’s purview to examine federal spending. Medicaid is a federal program administered by the state and paid for by a combination of federal and state dollars.

Coburn praised fellow Republican Sanford for his “bold plan.” Four other panelists, who were selected by Coburn with input from the governor, also commended his proposal.

The only panelist who did not was the designated “minority” witness. Democrats were allowed to appoint one person to the panel.

The object of the praise and criticism was Sanford’s proposal to fundamentally restructure the state Medicaid program by turning it into a system more similar to private health insurance plans.

Medicaid beneficiaries — poor children and adults, seniors and the disabled — would, for the first time, face co-payments for doctor’s office and hospital visits, plus higher out-of-pocket costs for prescription drugs.

The U.S. Department of Health and Human Services must approve the proposal.

Sanford says his plan will save the state $300 million over five years. Those savings are vital, he said, because Medicaid’s costs to the state are spiraling out of control. In 2005, $1 of every $5 the state spends goes to Medicaid, he said. By 2015, Sanford predicts, that will be $1 of every $3.

Sanford said it was not just about money. It also is about “social justice.” The state’s poor, especially poor blacks, have worse health than much of the rest of the state, which as a whole has worse health than most of the country. Sanford says his plan will improve health care for the poor.

His critics say Sanford’s proposal to hire private companies to provide Medicaid services will not save money because of greater administrative costs. They say it also removes the health care safety net for the state’s poorest individuals.

But those criticisms were rarely heard Friday.

Rep. Tracy Edge, R-Horry, the chairman of the S.C. House subcommittee that oversees Medicaid spending, said South Carolina is running out of options. Eventually, the choices will be raise taxes to pay for Medicaid, cut other services like education and law enforcement, or change how Medicaid works.

Dr. Donald Tice, a physician and a Sanford appointee to the state Board of Medical Examiners, did not so much laud Sanford’s plan as blast the Medicaid bureaucracy.

The S.C. Department of Health and Human Services is a cabinet agency that reports directly to Sanford, who routinely talks about how more agencies should report to him to improve accountability.

“We have 500 people administering claims for 800,000 recipients,” Sanford spokesman Joel Sawyer said. The governor’s Medicaid proposal would improve that service, he said.

Ed McMullen, president of the South Carolina Policy Council, a Republican-leaning think tank, said Sanford’s critics are using the same tactics opponents of welfare reform tried in the 1990s — that pregnant mothers and children would be left out on the street.

“It never happened,” he said, and it won’t happen this time.

Judith Solomon, the lone opponent of the plan allowed to speak, is a senior fellow at the Center on Budget and Policy Priorities in Washington, a left-leaning think tank. She does not agree with many of the goals of the Sanford plan.

“We all agree that Medicaid beneficiaries should have better choices, managed care and improved quality,” she said.

Solomon and the other panelists part company, she said, over how to make those changes. Much of what Sanford wants to do, she said, could be done without federal intervention.

In the audience sat an agitated state Sen. Robert Ford, D-Charleston. He asked for permission to speak, but his request was denied.

“This is ridiculous,” Ford said. “It’s ... one-sided. It’s a sham.”

Reach Gould Sheinin at (803) 771-8658 or asheinin@thestate.com.