South Carolina health coverage, cigarette tax bill stalls in state Senate

Legislation that would use an increase in the South Carolina cigarette tax to create a new health coverage program for low-income state residents has stalled in the state Senate Finance Committee, the AP/Myrtle Beach Sun News reports.

The bill, which was approved by the state House, would increase the cigarette tax from seven cents per pack to 57 cents per pack. Of the estimated $150 million the tax increase would generate, $100 million would be used to create a fund that would cover 75% of health care policies for residents with annual incomes of up to $21,600, with a maximum credit of $3,000. Employers with 25 or fewer lower-income workers would be eligible for a 67% credit for each worker, with the same maximum limit. The remaining money would go toward health insurance for high-risk individuals, cancer research, smoking cessation and prevention programs, and agricultural marketing.

However, the insurance program would require federal Medicaid waivers for the 160,000 people whom supporters say the plan would cover. State Senate Minority Leader John Land (D) said that there is no guarantee the waivers could be obtained and that the plan would waste money on administrative functions at state agencies and insurers that could be better spent in the existing Medicaid program. Land said, "I am not supporting this in any way, shape or form." He said putting the $150 million in new tax revenues into Medicaid would draw down $450 million in federal matching money, and carry significantly lower operating costs. Land said, "I just see such a waste of state dollars," adding, "This is one of the silliest things that I have seen proposed in South Carolina." The Finance Committee agreed to postpone debate on the bill until Thursday, when it will discuss the creation of the new insurance program and how the plan would affect private insurers' profits (Davenport, AP/Myrtle Beach Sun News, 5/5).