Contributed by theSC Small BusinessChamber of Commerce

The SC Small Business Chamber of Commerce has thrown its support behind a House bill that would help small businesses afford group health insurance. The bi-partisan bill, Working Families, Healthy Families, was introduced March 16 with 55 co-sponsors. This bill will also be offered as an amendment to the state budget.

In addition to addressing small business health insurance, the bill also provides funds for expanding the children's Medicaid health insurance program. Funding for both programs would come from a 32 cent increase in the cigarette tax.

Over 60% of the small businesses in the state can't afford to offer health insurance to their employees. Up to 850,000 South Carolinians are uninsured. The SC Small Business Chamber of Commerce continues to recognize the crisis in health care/insurance cost as a top priority. Affordable health care/insurance is essential to lower personnel costs to make small businesses more competitive for retaining skilled workers.

The Small Business Chamber is supporting the public/private hybrid Working Families, Healthy Families program. This Medicaid buy-in program, already in place in OK and AK, will authorize premium assistance to small businesses that employ 75 workers or less to provide private group health insurance coverage to all employees and spouses who are at or below 200% of poverty.

Approximately 60,000 uninsured workers plus spouses could be helped. For these employees, Medicaid funds would pay 60% of the premiums, and the employer and employee would pay the balance.

By reducing the cost to the employer for some workers, the business is then in a position to afford the group health insurance for all workers. Every dollar the state would put toward this program, approximately $87 million, would be matched by approximately 2.5 dollars of federal money.

However, before SC can ask for such a waiver, it is first required to expand our S-CHIP program, the Medicaid program that pays for health care for children in poverty. Currently, in SC our S-CHIP program only covers children in homes up to 150% of poverty while most other states cover up to 200% of poverty or more.

To be eligible for the waiver mentioned above, SC must raise the S-CHIP coverage to 200% of poverty. This will cover 40,000 more uninsured children. The state would need to increase its contribution to the S-CHIP program by about $20 million, which would be matched by $80 million of federal money.

An increase of 32 cents in the cigarette tax is proposed that will raise approximately $112 million. The cigarette tax would also become indexed to the Consumer Price Index to keep up with inflation. All the funds raised would go toward the Working Families, Healthy Families ($87 million) and S-CHIP ($20 million) programs except for five million to support a youth smoking cessation/prevention program and for the Department of Agriculture to help support our farmers.  

Georgia currently has a cigarette tax of 37 cents. NC is raising its cigarette tax to 35 cents in June 2006, and then it is to raise the tax to 40 cents in 2007.

With a 32-cent increase in SC's cigarette tax, our tax will be 39 cents as of July of this year if the proposal is adopted. SC would not be put in an uncompetitive situation with our border states.