Massachusetts Leaders Consider Cigarette Tax To Fund Health Insurance Law

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Massachusetts House SpeakerSalvatore DiMasi (D) and state Senate President Therese Murray (D) areconsidering an increase to the state's cigarette tax as one of severalproposals to address the greater-than-expected costs of the state's healthinsurance law, the Boston Globe reports. DiMasi and Murray areexamining several different options to ensure that the initiative is successfulin light of recent projections that subsidized coverage under the law couldcost as much as $1.35 billion by June 2011, according to the Globe.A $1-per-pack cigarette tax increase could generate $152 million annually,according to estimates by the Campaign forTobacco-Free Kids.

However, legislation to raise the cigarette tax has "languished" overthe past year and the New England Convenience StoreAssociation isexpected to strongly oppose any effort to increase the tax, the Globereports. Murrayalso is considering efforts to reduce costs by streamlining billing, expandingprimary care services and hearings regarding insurance rate increases. Inaddition, state lawmakers will consider increasing the penalties thatbusinesses must pay if they do not offer health insurance to employees(Dembner, Boston Globe, 2/6).

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Opinion Piece

As the debate continuesacross the country over whether all U.S.residents should be required to obtain health coverage, "the question in Massachusetts comes downto this: Have we promised more than we can deliver?" Globe columnist Steve Bailey writes. According toBailey, the first part of the state's health care reform, "hard as it was,was the easy part" because "[a]lmost everyone was a winner," butthe second part -- "controlling costs -- will involve harder choices, andwill produce losers as well as winners."

Bailey writes that in order to control costs, the "health care deliverysystem itself ... must be restructured" and that the "best solutionswill come from a remaking of the health care delivery system that emphasizesincentives for lower costs and improved quality." Bailey writes, "Massachusetts did whatno other state was willing to do because it got tired of access being heldhostage to cost," concluding, "But broadening coverage withoutslowing costs will not work. In the end, it will break the bank" (Bailey, BostonGlobe, 2/6).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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Comments

The only successful health care plans operate with a administration budget at 5-6%of overall cost. But because of the waste and political kickbacks our administration cost is about 36% of total health care costs Raising ciggarette taxes only lets more people get paid for doing nothing and more politicians with their hand out. Is it normal to start a program like this without knowing how your going to pay for it. Its like a person out of work buying a new car??????? And these people keep doing it. Catman