How A Tobacco Tax Increase Can Help Fund Massachusetts Health Reform

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How A Tobacco Tax Increase Can Help Fund
Massachusetts Health Reform

• Brian Rosman
• Health Care For All
• rosman_at_hcfama.org

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April 12, 2006 Chapter 58
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Shared ResponsibilityBasic Paradigm of
Massachusetts Health Reform

• Require all adults to be insured (if affordable
  coverage available)
• Make it easier to purchase coverage
• Employers pretax deductions
• Rational market individuals get group rates
• Subsidies for low income adults
• Adequate payment to providers

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Health Reform Costs( millions)
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What Were Buying - MassHealth

• Eligibility Expansions
• Childrens eligibility increased
• HIV program
• Below-poverty unemployed adults
• Benefits
• Dental care, dentures, eyeglasses
• Tobacco cessation and wellness
• Rate increases
• Tied to pay-for-performance, including
  disparities reductions

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What Were Buying - CommCare

• Commonwealth Care
• Comprehensive coverage
• Sliding scale premiums and co-pays
• No deductibles
• Choice of 4 managed care plans
• Enrollment over 170,000

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Results to Date -1

• Enrollment growth in public and private coverage
• Commonwealth Care 170,000
• Private coverage 100,000
• MassHealth 70,000

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Results to Date -2

• Urban Community Health Center percent of
  patients uninsured

• North Adams enrollment/outreach program Dec. and
  Jan. uninsured patients down 50

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Revenue Shortfalls Ahead

• Employer Assessments
• Legislature assumed 76 million in FY08 47
  million in FY09
• Actual revenue will be 6-10 million each year
• Hospital and Insurer assessments set by law
• Federal revenue up for negotiation
• General Fund overall structural deficit

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Tobacco Taxes Can Fill Gap

• Precedent from 1993, 1996, SCHIP
• Stable source of revenue
• Public health benefits of decreasing number of
  low-income smokers decreases costs in programs
  funded
• Addresses issue of income distribution of those
  paying tax
• Double our money through federal match

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Addendum Gov. Patricks Tobacco Tax Enforcement
Proposals

• Governors budget proposes new enforcement of
  existing tobacco taxes
• Hi-tech stamps on cigarette packs
• Taxing cigars and smoking tobacco at retail level
• Collect sales tax from wholesalers, not retailers
• Annual value - 33 million