Two plans can help state’s uninsured

February 6, 2008

South Carolina this year could make substantial progress on providing health-care coverage to many of the 667,000 uninsured residents of this state. A bill backed by Gov. Mark Sanford would allow small businesses to band together to buy health insurance for their employees. Sanford in his State of the State address urged lawmakers to approve the bill, which would make it easier for small businesses to pool resources and have the health-insurance purchasing power of larger businesses. He also toured the state last week in part to support the bill.

Meanwhile, a more ambitious plan proposed by the South Carolina hospital and medical associations is attracting interest among legislators. Sanford, however, already has cast doubt on this second initiative because it calls for a 50-cents-a-pack cigarette tax increase. But he’d be unwise to close the door at this early stage to a plan that could provide health-insurance coverage for as many as 200,000 uninsured South Carolinians.

The first bill, the Sanford-backed legislation for small business, is quickly making its way through the Legislature. That’s no surprise because it seems largely uncontroversial.

“Giving the 97 percent of businesses in this state that are small businesses another tool to main competitive in today’s world is key to the notion of creating better soil conditions for companies to grow and compete,” Sanford said in a press release. “While there’s no silver bullet when it comes to health care, this step could go a long way toward making insurance more affordable for a whole host of workers in this state- over half of who are employed by small businesses.”

One group, however, the S.C. Small Business Chamber of Commerce, has objected to the bill, saying it wouldn’t be economically feasible because the number of employees to be covered would be too small. About 60,000 people are needed for a successful pool, said Chamber CEO Frank Knapp Jr.

Critics may also argue that the plan’s relative popularity among legislators is due to the fact that it will cost the state little to no money. And there is concern that legislators may use this modest change to avoid dealing with more substantive health-care proposals.

Another group representing the small businesses, the National Federation of Independent Business, supported the bill but said the success of the plan will depend on whether the private insurance companies respond with good deals for small businesses and their employees. “We don’t ultimately know whether the private market will indeed step in and underwrite these policies, but we think that it will,” said Gary Selvy, spokesman for the NFIB.

The bill was patterned on a 2006 Virginia law. The plan might not work- or work as well as hoped- but there’s no harm in trying it.

Meanwhile, a group calling itself the Covering Carolina Collaborative has devised a bold and comprehensive plan to provide coverage for about one-third of the uninsured people in the state. Designed by Robby Kerr, the respected former director of the state Department of Health and Human Services, the plan would expand Medicaid coverage, provide refundable tax credits fr individuals and small businesses to use for health insurance, and create a pool where high-risk, low-income residents can purchase more affordable insurance.

It would cost between $195 million and $230 million and be funded by raising the cigarette tax by 50 cents a pack. It’s a serious and compelling plan proposed by the Collaborative’s prominent members, including S.C. Hospital association, the S.C. Medical Association, the S.C. Chamber of Commerce and the S.C. Alliance of Health Plans.

Gov. Sanford and some other lawmakers have been reluctant to consider a cigarette tax increase that is not offset by a corresponding reduction in another tax. But they’d be wrong to dismiss the collaborative’s plan, given the fact that it could be a big first step toward addressing one of our state’s most urgent needs- helping almost 700,000 uninsured South Carolinians obtain affordable health-care coverage.

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