Cigarette tax bill debate draws out in Senate

Thursday morning, debate will continue on a state cigarette tax hike, as the Senate Finance Committee wrestles over how the money should be spent. At issue: an amendment to set up a tax credit for businesses who don’t cover employees–plus offer insurance to people at highest risk of going without insurance.
The amendment is sponsored by Orangeburg Democrat John Matthews.
Clarendon’s John Land prefers use the almost $150 million in cigarette tax revenue to work within the existing programs, drawing down another $450 million.
Land insists, “We could increase our eligibility standards for the existing programs at no additional administrative expense. The mechanism and the machinery is all out there, ready to take these dollars. We can cover people who have neer ever been covered in South Carolina before with a good policy of insurance. Our hospitals, our doctors could be paid more. Our druggists could be paid more. We could have one of the best systems anywhere in the country.”
Land, a senior Democrat, is adamant that this sets up an expensive and complicated new way to spend the tax money.
“We’re going off on this very expensive route of private insurance, with administrative costs with insurance company, administrative costs with the agent, administrative costs with the Department of Insurance, administrative costs with Health and Human Services–eating all up this money that we want to go to sick people in South Carolina,” says Land.
That could be up to 25 percent in administrative costs, according to a Department of Insurance ballpark estimate made in Finance Committee Tuesday.
The South Carolina Department of Health and Human Services would be charged with administering part of this, applying for a federal waiver based on the cigarette tax revenue to make it happen. HHS Director, Colonel Emma Forkner explains that the waiver the bill banks on, may not be assured.
She says the Centers for Medicaid and Medicare Services (CMS) explained that this type of waiver was created in 2001 in the Bush administration to bring private industry in to help take care of the uninsured.
“When we approached CMS about three weeks ago about having a concept meeting, we discovered that they had taken the mechanics of the program off of the Internet site and they cautioned us at this point to say the Obama Administration may not continue with this type of waiver, but that we should proceed and we could have our discussions. But they wanted to make sure we knew that.”
Department of Insurance Director, Scott Richardson also seemed uncomfortable with specific time lines and costs to administer his part of the proposed program, because some of that responsibility would be new to his agency.
The Finance Committee carried over discussion on the amendment as well as the cigarette tax bill (H.3584) until Wednesday morning.
Last legislative session, cigarette tax legislation failed to fight the governor’s veto because lawmakers could not agree on how to spend the money.