COLUMBIA, S.C. - The state's poor, disabled and elderly would see a radically altered Medicaid system under a proposal awaiting federal approval.

Under the plan, Medicaid participants would be given personal health accounts to pay for part of their medical expenses, based on their age, sex and physical condition. The amount would be similar to what people in the private sector pay for medical care. And patients would have to use it to buy medical coverage that could range from a high-deductible plan to full-service program.

People in the program also would get debit cards to pay deductibles at the hospital, doctor's office or pharmacy.

The changes are needed to bring innovation and frugality to bear on the system and "remove the disconnect between Medicaid beneficiaries and the delivery and payment for their care," the agency said.

The proposal, under development for a year, was submitted to the federal Centers for Medicare and Medicaid Services last week, said Brian Kost, spokesman for the state Department of Health and Human Services. The plan still needs months of back-and-forth bargaining between the state and federal agencies before the first Medicaid debit card is swiped at a hospital, he said.

In its proposal, the state agency said, "change is vital to the long-term fiscal health of Medicaid and the physical health of the program's beneficiaries."

The program's rapid growth and sheer size have prompted calls for years to make Medicaid more efficient and less costly in South Carolina and elsewhere. That's a tall order for a program that provides basic health care coverage for about 850,000 South Carolinians. It pays for about half the births and three of four nursing home beds in the state.

State and federal Medicaid spending grew 50 percent from 2000 to $4.2 billion in 2004.

The fast growth "is just eating up more of our state's resources," said Chris Drummond, spokesman for Gov. Mark Sanford.

Sanford pushed the program last fall in a paper he wrote to the Centers for Medicare and Medicaid Services, which handles changes to state programs.

"You're empowering Medicaid recipients to become more cost-conscious consumers," Drummond said. "Hopefully, this will provide both better quality of service and to help rein in some of the cost that we've seen."

Sanford also pushed the debit-card concept in that report, saying consumers will spend more carefully and look for bargains.

The debit-card concept is worrisome, said Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, which does advocacy work for low-income communities. Berkowitz also serves on a committee set up to review proposed changes in the state Medicaid plan.

If a parent has to spend money from the card treating a child's broken arm, she wants to be sure the parent won't be without money to handle a severe ear infection a few months later.

"That concerns me a lot," she said. "It can lead to a lot of problems for being able to have care," Berkowitz said.

The plan also calls for linking Medicaid recipients to care providers the way employers do with health plans and managed care networks, such as HMOs.

"The whole idea is you're getting a medical home," Kost said.

While Berkowitz agrees that creating a medical home for Medicaid recipients is a good thing, she said she was surprised the plan was sent off for federal approval without the final draft being scrutinized by the state Medical Care Advisory Committee.

Kost said that panel had seen previous portions of the plan, but not the final version, until Thursday.