By Liv Osby | Staff Writer

U.S. Sen. Lindsey Graham introduced a bill Wednesday that would allow states to opt out of the Medicaid expansion expected in 2014 under the federal health reform law.

But critics say the legislation offers no alternative for low-income uninsured people and isn’t likely to advance.

Graham and fellow Republican Sen. John Barrasso of Wyoming said Medicaid is crushing states now.

They say the 17 million new enrollees expected under the expansion will only make things worse, forcing states to shift funding from education and other public services to fund it.

About one in four South Carolinians is on Medicaid now, most of them children.

The law permits anyone at 133 percent of the federal poverty level to be eligible, or up to 500,000 more enrollees in the Palmetto State. That will mean about $1 billion in state funding over a decade, Graham said.

“When fully implemented, nearly 30 percent of South Carolinians will be eligible for Medicaid,” Graham said. “States like South Carolina can simply not afford this burden.”

The state Department of Health and Human Services, which administers the Medicaid program, declined to comment, instead deferring to Gov. Nikki Haley, who called the expansion a “disaster for South Carolina’s budget.”

Earlier this year, DHHS cut reimbursements to health-care providers to help save $125 million in fiscal 2012.

“Sen. Graham is absolutely doing the right thing for South Carolina, and I applaud him for it,” Haley said in a statement.

“With an opt-out provision, we will be able to address our real health care needs without busting our budget and without having to follow mandates from Washington.”

But Clemson University political science professor Bruce Ransom said the bill’s chances of advancing are slim because it’s unlikely to get the 60 votes needed in the Senate.

“I can’t see the Democratic leadership or the Democrats being in support of this,” he said. “It’s part of the campaign rhetoric. It appeals to states that are opposed to so-called Obamacare.”

Meanwhile, Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, said the expansion is necessary because there are so many poor people in this state.

“The right prescription for South Carolina is to get health care for as many of our citizens as possible,” she said.

“If we want to continue to allow our workers to earn low wages that don’t allow them to purchase insurance, then Medicaid will be the only option for them.”

She also said the bill offers no alternatives, adding that free clinics are struggling now.

Allen Stalvey, executive vice president of the South Carolina Hospital Association, said the bill “doesn’t sound like something we would support.”

Hospitals are required by law to treat everyone, including the uninsured. And they are providing more charity care than ever because of the ailing economy, he said.

Traditionally, hospitals have shifted some of the cost of caring for the uninsured onto insured patients.

But that’s increasingly difficult as the number of uninsured continues to grow and hospitals deal with three-year insurance contracts, he said. And higher health insurance premiums typically mean that more people become uninsured, perpetuating the cycle.

The uninsured population in South Carolina grew from 16.8 percent in 2009 to 20.6 percent in 2010, according to the U.S. Census.

“We’re getting squeezed and we need to look at ways to expand coverage to individuals, not reduce coverage,” Stalvey said. “It’s got to come from some place.”