CHEYENNE -- Many low-income Wyoming residents would be able to get health care through a state program under a bill that Gov. Dave Freudenthal signed into law on Wednesday.

The bill, sponsored by Sen. Charles Scott, R-Casper, calls for putting up $750,000 from the state's Tobacco Settlement trust fund to establish personal health accounts for up to 500 participants. They could use the money only to pay for health care and health insurance.

Scott has said the pilot project should make low-income people feel they have a stake in keeping their own health care costs down. He said any success might help to show how to reduce high health care costs nationally.

"We're going to be trying some fairly novel things to deliver people some fairly decent health coverage at a price they can afford, and keep affording," Scott said on Friday, the last day of the legislative session.

Freudenthal told reporters at a press conference on Wednesday that Wyoming has no choice but to rein in health care costs. Health care costs are going up between 10 to 14 percent a year -- far outstripping the typical annual increase in wages and government revenues, he said.

The bill calls for the Wyoming Health Insurance Pool to administer the project. A committee will design a health benefits package and plan how to operate it.

While many details remain to be worked out, the program calls for participants to use their accounts to pay for preventive services, make deposits into personal health accounts or to pay premiums for approved insurance plans.

"There's limitations on what they can do with it; it isn't purely their own money," Scott said. "They can't take it and put a down payment on a snowmobile, or something like that."

The bill became effective upon Freudenthal's approval. Scott said he expects it will take at least until midsummer to work out the details of the insurance coverage.

Scott said it's possible the state could pick up federal or private funding to help increase the number of participants in the program, which could rise up to 2,500 after the first year.

Officials who are designing the insurance coverage will have to find a balance between retaining a state interest in the money deposited into the individual health savings accounts while also making participants feel that it's their own money, Scott said.

Dr. Brent Sherard, director of the Wyoming Department of Health, said his department will evaluate the program's effectiveness. He said the economic downturn of the past couple of years has put a greater burden on the Medicaid system in the state.

The Medicaid program in Wyoming will cost nearly $1 billion over the coming two-year financial period, with the federal government picking up just over half the cost. There were nearly 65,000 program participants in the state in January.