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Wednesday, August 17, 2005

S.C. earns more attention

[Kevin Freking, "S.C. proposing to redefine Medicaid," Associated Press, The Wichita Eagle, 16 August 2005.]

South Carolina's plan to salvage its broken Medicaid program is getting national attention as state leaders around the country attempt to come up with answers to this budget and health care headache. Michael Bond, who has written for and appeared on behalf of The Flint Hills Center, has been actively involved in the plan's development from the beginning:

The state says its proposal to establish personal health accounts for most of the state's 850,000 Medicaid recipients will "redefine health care in the United States."

The account would be used to purchase private health insurance, or pay for care directly. And the amount of money allocated to each account would depend on the person's age, sex and physical condition.

That's much different from the way Medicaid operates. Now, those whose incomes are low enough and who meet other eligibility requirements are entitled to receive certain approved health care services regardless of costs.

South Carolina would cap how much it will spend on a recipient, and if health care costs more than the account will pay for, then the low-income people would have to make up the difference themselves or go without.

States have to get waivers from the federal government whenever they want to use federal Medicaid funds in ways not authorized in federal law. But the implications of South Carolina's waiver request, contained in a 42-page document submitted to the Centers for Medicare and Medicaid Services in June, extend far beyond South Carolina.

If South Carolina's plan is approved, analysts say, other states will seek similar changes. Eventually, the experiment could influence national policy, said Nina Owcharenko, a senior health care analyst with the Heritage Foundation, a conservative think tank.

"Remember, welfare reform didn't come from Washington the first time around," she said. "It came from states like Wisconsin, which received waivers, and their work later encouraged new federal policy."

Devon Herrick, a senior fellow at the National Center for Policy Analysis, said the plan promotes personal responsibility.

"If they've made wise choices, they might have money left over," Mr. Herrick said. "If they've made poor choices, it might take some money out of their pockets."


[Michael Bond and Matthew Hisrich, "Medicaid Lessons from Former Communists," WIBA Newsletter, February 2005.

Devon M. Herrick, "Give Medicaid recipients more control," The Wichita Eagle, 3 March 2005.]

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