Beginning a two-day swing through this key early primary state, Arizona Sen. John McCain today outlined a series of health care proposals, including a plan that would grant patients a limited right to sue health maintenance organizations that have denied them medical treatment.

In a speech to about 600 people at a Charleston Rotary Club luncheon here, the Republican presidential contender pledged to support "responsible" patients' bill of rights legislation. But McCain said he would link any widened ability to sue health plans to tort reform measures that would "tame legal predators and address the problem of runaway punitive damages."

Under his plan, McCain said, independent boards would be set up in each state to review disputes between HMOs and their patients. Patients who were dissatisfied with the outcome of the review could sue in federal court, he said. There would be a ban against punitive damages and limits on the size of noneconomic compensatory damage awards--such as those for pain and suffering--but there would be no limits on awards for economic damages, such as lost wages.

Under current law, patients can sue in federal court, but only to secure medical treatment they have been denied, or its monetary value. They cannot sue for related economic or noneconomic damages. McCain's plan thus would go further than many congressional Republicans favor by opening the federal courts to those types of damage awards.

The Arizona Republican tied these and other health care proposals to his main theme of campaign finance reform, saying that overhauling the health care system will not be possible "as long as the special interests' agendas are greased with unlimited amounts of soft money contributions to our campaigns."

McCain's speech here today was billed as a major health care initiative but there was considerable confusion in his presentation. Hours after the speech McCain's aides were calling reporters with estimates of the cost. In the end, they said the annual cost of the plan, when fully implemented in its fifth year, would be $7.6 billion.

One of the largest components of the plan would be block grants to the states, totaling $5.1 billion in the fifth year, to help the elderly pay for drugs, a much more modest drug payment plan than President Clinton has proposed. The benefit would be available to senior citizens with incomes up to 200 percent of the poverty line, which currently would set the limits at $16,480 for an individual and $22,120 for a couple.

McCain said he would also support a pilot program, beginning in five states, to help cover the cost of catastrophic drug expenses for all the elderly, regardless of income.

In comparison, Clinton's drug plan, favored by many Democrats, would cost $118 billion by 2010 and would subsidize medication for all elderly Americans who wanted to take part, regardless of income.

McCain also promised to help states do a better job of identifying children who are eligible for but not enrolled in the Children's Health Insurance Program, which provides health care coverage to children from low-income working families. If necessary, he said he would provide more federal funds to cover the cost of insuring additional children.

McCain is the first of the Republican presidential candidates to offer a specific series of health care proposals, although they are far less ambitious than the plans of the two Democratic contenders, Vice President Gore and former New Jersey senator Bill Bradley.

His audience listened politely as McCain outlined his plan, but applauded only twice, when the former Vietnam War prisoner of war mentioned veterans.

CAPTION: In South Carolina, John McCain becomes first GOP candidate to offer specific health proposals. He linked his plan to tort reform and a "soft money" ban.