State lawmaker proposes $1 assessment per pack of cigarettes, other tobacco products to generate Medicaid dollars

12/08/2017 01:26 PM

Don’t call it a tax.

That’s the message state Sen. Stephen Meredith hopes to convey in next year’s legislative session as he tries to pass a bill that would create a $1 health care reimbursement assessment on every pack of cigarettes sold in Kentucky starting Oct. 1. Meredith pre-filed the bill on Thursday.

That would also apply to sales of dip, chew and snuff tobacco, and distributors would also have to pay a dollar per unit sold.

Meredith, R-Leitchfield, said in a phone interview with Pure Politics that the proposal would generate $300 million each year, most of which would benefit the state’s Medicaid program.

The bill calls for 90 percent of fee’s proceeds to go to a Medicaid tobacco-related illness reimbursement fund while the remaining 10 percent would fund grants for local tobacco cessation programs run by county health departments.

“What I’m trying to do through this bill is recognize that people have the right to smoke,” Meredith said Friday. “I don’t begrudge them that, but don’t ask me to pay for your healthcare costs whenever you incur those illnesses that you know you’re going to have. It’s created a tremendous financial burden, I think, for our state.”

Meredith said the legislation, if passed, would allow the state to generate more money for its share of Medicaid while also freeing up dollars for other needs like pensions, education and workforce development.

He estimated the $1 assessment would generate about $300 million each year if approved by the General Assembly and signed into law.

The proposal would have another impact in providing an economic incentive for smokers and other tobacco users to quit.

“In other states who have raised the cost of cigarettes we’ve seen that relationship,” Meredith said. “It’s got a direct correlation, so yeah, what I hope it’ll do obviously is to encourage people to quit smoking, and by virtue of that they’re going to improve their health and it’s going to have significant economic ramifications throughout the state.

“One, it should make our insurance premiums less expensive because we know that insurance costs are based on the health of our population. There’s a savings there. We should see a savings in productivity. Kids who suffer the effects of secondhand smoke, we should be able to address absenteeism in school systems.”

Meredith said he’s optimistic the measure will pass the General Assembly next year, and so far, he’s only spoken with his Senate colleagues about the legislation.

Some have said they support the concept, Meredith said, noting that health-focused groups like the Foundation for a Healthy Kentucky have backed his idea.

But adding costs to cigarettes and other tobacco products is a hurdle that Meredith hopes to clear in the upcoming budget session.

“Everybody’s got an aversion to taxes,” he said. “That’s why we’ve had difficulty getting this done in the past. All I’m doing is asking people to be responsible, be accountable for your own health and don’t ask non-smokers to pay for your health care in the future if you’re going to choose to do this.”

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