SC Gov Proposes Health Coverage Plan

Tens of thousands of low-income South Carolina children granted health care coverage last year would lose the government-paid insurance under a budget plan unveiled by Gov. Mark Sanford.

The GOP governor, who has repeatedly decried spending by fellow Republicans who control the Legislature, is looking to save $22 million by axing the coverage for about 70,000 low-income children in the state. It's the latest salvo in a political fight he lost last year when lawmakers overrode a veto that would have done the same thing.

"We cannot grow government faster than people's paychecks and wallets," Sanford said Monday in releasing his budget proposal for the next fiscal year. "This will be a tough budget year."

Sanford has repeatedly criticized his fellow Republicans who control the Legislature of spending too much during prosperous economic times. His plan, which needs legislative approval, would hire more state troopers, cut income taxes, raise the nation's lowest per-pack tax on cigarettes, and spend an additional $50 million for land conservation.

To encourage early graduation, Sanford wants to give $2,000 to teens who earn enough credits to graduate high school after three years and $1,000 for students who graduate one semester early.

Sanford's plan would reduce the state's current budget by $326 million, to $6.8 billion.

The largest single-item savings would come from undoing an expansion of the Children's Health Insurance Program and it drew swift criticism from advocates of the plan, which is aimed at covering children of parents who make too much money for Medicaid but who still lack insurance.

"The governor wants to spend $50 million in additional money to take care of land when he's not willing to spend any additional dollars to take care of health care in the state?" said House Minority Leader Harry Ott, D-St. Matthews. "These are the most vulnerable who have nowhere else to turn, and turning our back on these children is unacceptable."

The health program, which also uses federal money, passed last year and is awaiting a federal OK, said Department of Health and Human Services spokesman Jeff Stensland. The agency expected to start enrolling children this spring, he said.

South Carolina's program currently covers about 67,000 children whose families earn up to 150 percent of the poverty rate, which amounts to about $31,000 for a family of four. The expansion passed last year increased eligibility to 200 percent of the rate, or $41,300 for a family of four.

Sanford has said families entering the program who earn the higher rate should have to make limited co-payments. He said the state's Medicaid costs are already skyrocketing - accounting for $1 of every $5 in spending - and legislators shouldn't continue to overload the system. The state already covers 40 percent of children up to 18.

"We recognize it's a very worthy goal, but we have to look at the idea of limited copays," said Sanford spokesman Joel Sawyer.

The governor's spending plan would also put an additional 50 state troopers on South Carolina roadways and hire 228 new prison guards Health Insurance.

Sanford also wants to raise South Carolina's cigarette taxes by 30 cents per-pack, to 37 cents and use the estimated $107 million to cut income taxes.

The House passed a cigarette tax increase last year and the debate will pick up again in the Senate when the 2008 legislative session starts Tuesday. However, Democrats and many Republican leaders believe any extra money from cigarettes should go toward health care, including Medicaid, the federal-state program that helps pay for care for the needy and people with disabilities.

An estimated 700,000 South Carolinians lack health insurance coverage.

Critics of Sanford's plan also contend it would funnel the most income tax savings to higher wage-earners Health Insurance.

Sanford said any cigarette tax increase, no matter how high, would only patch Medicaid long enough to keep it solvent an additional 18 months. He said it makes more sense to use the money for economic development.

"The notion that a cigarette tax is the cure-all to health care in South Carolina is completely at odds to reality of what it would take to keep Medicaid viable in the long run," Sanford said.

The governor's spending plan also includes saving $17.6 million by not rehiring employees approaching the end of a five-year retiree incentive program, and saving $16.4 million by moving the state health plan's pharmacy benefits to generic drugs. It also proposes reducing money to the state's research colleges to encourage collaboration.