For awhile it looked like the economy would cripple South Carolina's Medicaid system, but the state Senate commendably found a way to fully fund the $183 million in programs. The House should follow the Senate's lead, though admittedly it won't be easy.
The rescue effort involves making cuts - some of them deep and painful - in other agencies of state government. But it's the right thing to do. When it comes to priorities, Medicaid - along with education, roads and law-enforcement - should be at the very top of the state's must-do list.
Until the Senate moved, huge reductions in medical services to the poor and disabled were in the offing. Then there was the forfeiting of millions of dollars in federal funds. For every $30 the state contributes to Medicaid, Uncle Sam puts in $70.
However, the Senate's rescue plan is for one year only and Medicaid cannot continue feeding off other agencies' budgets in order to survive. For the state to continue maintaining Medicaid services at the current level, a stronger and more reliable source of funds must be found.
There are three ways for that to happen. The first, and certainly most preferable, would be for a fully revived economy to pump up the revenue stream enough to get the job done. But that's unlikely; next year's revenue outlook is not much better.
The second is to raise taxes; in fact there was a move in the legislature to boost the tobacco tax, but Gov. Jim Hodges scotched the proposal.
The third is to make efficiencies, i.e., cut back on waste and fraud. If successful, this could provide the same standard of Medicaid services at less cost. This is the direction the General Assembly is headed.
The House budget already includes $300,000 for a zero-based budget review of the Department of Health and Human Services, the state agency that administers Medicaid. Though it's provided no money yet, the Senate has OK'd forming a joint legislative study panel to look at the problem.
And the state Legislative Audit Council will also be auditing the agency again. After the last audit two years ago, the council reported DHHS "has not aggressively pursued fraud and abuse and has given only minimal recognition to fraud as a major problem."
Clearly, these efficiency reviews are necessary to ensure more accountability in the department and to enable lawmakers to make informed decisions on Medicaid issues next year.