Posted on Thu, Mar. 20, 2003


House to mull Medicaid proposal
Lawmakers to consider plan that would avoid need to boost cigarette tax

Staff Writers

The S.C. House is poised to quash support for a cigarette tax increase today when it considers a proposal to pay for health care without making smokers pay more to light up.

In a procedural move designed to speed up the legislative process, the GOP-led House is expected to put a proposal to reform Medicaid -- the health care program for the state's poor, elderly and disabled -- at the top of its agenda today.

Within that sweeping legislation is a plan to restructure the state's tobacco bonds to provide steady income for the ailing Medicaid program -- and to avert the need to raise the cigarette tax as much as 53 cents per pack.

The key House vote comes a day after a flurry of activity Wednesday on the cigarette tax and health care spending.

Gov. Mark Sanford, who on Friday endorsed a plan to increase the cigarette tax in exchange for a gradual rollback of the state income tax, traveled to a local hospital to tout his plan and visit Medicaid patients.

Key senators, including the Senate's chief budget writer, offered support for the governor's plan "in principle" and advocated for stable funding for Medicaid.

And House leaders defended their plan to restructure tobacco bond money amid concerns from state Treasurer Grady Patterson that the deal has "significant, negative economic and other consequences" that make it unattractive.

GOP leaders say Patterson's analysis is flawed and that the proposal provides a long-term remedy for Medicaid. Patterson stood by his criticism Wednesday.

House leaders also reiterated their aversion to raising taxes to counter an economic downturn that has South Carolina facing its worst budget crisis in nearly half a century.

"I don't think in this economic downturn to put a further burden on the citizens of this state is the thing to do," said House Speaker David Wilkins, R-Greenville. "The goal has to be and should always be to fully fund Medicaid. We believe in the budget we passed, and the plan we have will do that."

Meanwhile, House Democrats charge GOP leaders are trying to ram through proposed Medicaid reforms amid waning support among Republicans for the measure. State Rep. James Smith, D-Richland, the House Democratic leader, said placing the proposal on the fast track will limit full legislative debate.

"They have been able to arm-twist their way into having the votes to cram this thing through tomorrow (Thursday)," Smith said. "But they know if they allow this to be subjected to public scrutiny, to public input, their arm-twisting isn't going to be enough."

Outside the State House on Wednesday, Sanford toured Palmetto Health Richland, where officials said 31 percent of their patients rely on Medicaid for treatment.

After speaking with doctors in the pediatric critical care unit, where all 11 patients are on Medicaid, Sanford told reporters he "learned what I think a lot of people in South Carolina know -- Medicaid makes a profound impact on a lot of children's lives and a lot of adults, as well."

The state's Medicaid program needs about $192.5 million for the budget year that begins July 1 to maintain services. Heading into last week's budget debate, House budget writers had whittled the need to nearly $52 million.

During the budget debate, House leaders unveiled a plan to close the gap, in part by restructuring the tobacco bonds to generate $45 million during the next budget cycle.

But the proposal has many skeptics. And momentum is building within the General Assembly for a cigarette tax.

"Failure to provide a stable and reliable funding stream for Medicaid would raise the cost of health insurance for businesses and consumers because of the cost shifts from the uninsured to the insured," said Senate Finance Committee chairman Hugh Leatherman, R-Florence.





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