Funds generated from tobacco tax would go largely to health care
If Missouri voters approve a tax increase Tuesday on tobacco products, much of the new money would go to health care.
Reimbursement rates would rise significantly for doctors and hospital trauma centers that treat low-income people. And more Missourians could become eligible for an expanded state Medicaid program.
The tax increase also would guarantee money for an existing prescription drug program for low-income seniors. And health programs could benefit through grants to life sciences research.
Smaller portions of money would go to anti-tobacco programs and child care centers, which supporters say also affect the health of Missourians.
"The citizens of the state of Missouri benefit from this proposal," said Dwight Fine, senior vice president of the Missouri Hospital Association, the biggest financial backer of Proposition A. "It is a benefit to the patients that we treat and the communities that we serve."
Opponents find it difficult to believe that taxpayers -- in this case, tobacco users -- would reap the benefits from a 324 percent tax increase on cigarettes.
"To partially address a statewide health care crises by taxing the 27 percent of the population that smokes is not only patently unfair, it lacks leadership, it lacks fiscal responsibility and ultimately it is a cowardly way to solve the problem," said Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association.
To that there is a quick retort: "Tobacco causes the health care problem. Proposition A makes tobacco pay the health care bill," said Brad Ketcher, spokesman for Citizens for a Healthy Missouri, the coalition that petitioned to get the measure on the ballot and is leading the advertising campaign.
The official ballot estimate is that Proposition A would generate $342.6 million annually by raising the cigarette tax to 72 cents a pack from the current 17 cents and raising other tobacco taxes by 20 percent.
But the state budget office projects $311.8 million annually -- the figure Gov. Bob Holden would use in proposing next year's budget, said budget chief Linda Luebbering.
If approved by voters, the higher taxes would take effect Jan. 1. For the first six months, the state expects to receive $131.8 million, which it could use for any of the areas outlined by the ballot measure.
Beginning July 1, 2003, the money would be divided according to percentages set by the ballot measure -- 43 percent for general health care programs; 29 percent to raise reimbursements for hospitals and physicians and fund medical emergency preparedness; 14 percent for life sciences research; 7 percent for early childhood programs; and 7 percent for anti-tobacco programs.
Leone and other opponents of Proposition A have criticized it for taxing tobacco yet directing just 7 percent toward anti-tobacco efforts.
Ketcher said tobacco-related health problems account for a good part of Missouri's Medicaid expenses, making it necessary to find more money for other health care needs, such as trauma care and physician reimbursements.
Missouri's Medicaid reimbursement rate is about half of what doctors would receive under the federal Medicare program for the elderly, said state Medicaid director Greg Vadner. And Medicare reimbursements generally are below those of private insurance.
Proposition A would make Medicaid reimbursements at least equal to those of Medicare. Physicians in hospital trauma centers would be guaranteed Medicaid reimbursements three times the Medicare rate -- potentially higher than private insurance reimbursements.
Supporters say the extraordinary rates are necessary because Missouri's trauma centers are in financial trouble. All of Missouri's 142 hospitals have emergency rooms. But just 32 have trauma centers able to handle the most serious cases on short notice.
In the past few years, four hospitals have closed their trauma centers -- Skaggs Community Hospital in Branson; Ozarks Medical Center in West Plains; Crossroads Regional Hospital in Wentzville; and Christian Northeast Hospital in St. Louis County.
"The big issue is the cost of maintaining the medical staff," Fine said. "We're trying to enhance their Medicaid reimbursement to where it would be sufficient to continue the trauma services by neurosurgeons, orthopedic surgeons and that kind of specialists."
Critics call Proposition A a government gift to doctors, hospitals and medical groups -- a new entitlement in state law.
But doctors say patients also will benefit.
If reimbursement rates are increased, "providers could expand the number of Medicaid patients they see in their offices. And it becomes much less expensive if you can prevent diseases," said Dr. Ted Groshong, president of the Missouri chapter of the American Academy of Pediatrics and an associate professor at the University of Missouri-Columbia.
Much of the rest of the new tobacco taxes would go to programs that were supposed to be funded through Missouri's portion of a national legal settlement with big tobacco companies.
Holden has used that money to cover budget shortfalls instead of directing it as budgeted to life sciences, anti-tobacco efforts and early childhood programs.
A potential anti-tobacco plan already has been drafted, with such things as media ads, school and community programs and efforts to help people quit smoking.
What the plan lacks is money, which is where Proposition A comes in.
"A lot of work has been done, so we're just waiting, chomping at the bit to put this out to the communities across the state," said Lori Pickens, chief executive officer of American Lung Association of Eastern Missouri, based in St. Louis.