Medicaid reform expected by '07

Health savings accounts should be in place by January, Sanford says

BRUCE SMITH

Associated Press

CHARLESTON - Health savings accounts for S.C. Medicaid recipients should be in place by next January because of action Congress took on the federal budget, Gov. Mark Sanford said Thursday.

The budget reconciliation bill approved Wednesday allows 10 states to start pilot Medicaid programs like one South Carolina has proposed.

The state has proposed creating personal health accounts for most of its 850,000 Medicaid recipients. The accounts could be used to buy private health insurance or pay for care directly.

South Carolina had applied to the federal government to get a waiver to allow the Medicaid changes. Because of the congressional action, South Carolina will now apply to start one of the pilot programs, Sanford said.

The change would not need approval by the General Assembly, he said.

"It allows people not only to spend money on health items but also educational, (and) job training programs after they leave ... the Medicaid program," said Robbie Kerr, the director of the S.C. Department of Health and Human Services.

"What we're after is a culture of health in South Carolina," Sanford said during a news conference at the Medical University of South Carolina.

He said the accounts will give people more choice and provide incentives for them to take better care of themselves and so save health costs.

Dr. Raymond Greenberg, the president of MUSC, said something needs to be done to control the ever-rising cost of Medicaid.

"At the same time we think we can get a better quality outcome for the dollars being spent" under the plan, he said, noting that Medicaid pays for half of the births in South Carolina.

Sanford's proposal has drawn criticism from advocates for the poor and disabled as well as lawmakers who say they were left out of the initial discussions.

Kerr said more analysis is needed on what Congress approved, but it seems to be an improvement over what the state could get through a waiver.

The bill would provide a $2,500 account for adults and $1,000 for children. There would be full health coverage for Medicaid recipients for excessive medical costs.

Sanford has said the market approach will slow growth and save $300 million dollars over five years. South Carolina now spends about 20 percent of its budget on Medicaid, and that's projected to grow to 29 percent within a decade.

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