Tobacco’s continuing impact on Health Care Costs

Tobacco Use & Exposure isDriving Health Care Costs

$4.5 Billion is spent every year in Mass treating tobacco related illness – that’s 10% of our annual health care expenditures *

Today, each Massachusetts resident pays an average of $889 to cover those smoking-related health care costs *

Examples of Acute Care: Asthma Cancer (Pancreatic, Oral, Bladder, Lung, Breast,

Esophageal) Heart Attacks & Strokes Emphysema

* Department of Public Health, Massachusetts Tobacco Cessation and Prevention Program

Context/Background on Tobacco Control

Policies According to the CDC & MA DPH’s Tobacco Cessation and

Prevention Program, there are five essential tools to virtually end smoking, improve health and save billions of dollars in health care costs.

1) Ensure that all residents have access to effective cessation services2) Protect young people from tobacco industry tactics3) Implement evidence-based pricing strategies4) Ensure that all health care visits include tobacco interventions5) Promote a smoke-free environment for all residents

Progress These policies and systems have brought the MA smoking rate

in 2010 to 15%, one of the lowest smoking rates in the country. *

* Department of Public Health, Massachusetts Tobacco Cessation and Prevention Program

Tobacco Use is Still a Problem

While we have made progress in Massachusetts, 222 MILLION packs of cigarettes are still sold every year in our state

Use of OTP (Other Tobacco Products) is on the rise, especially among youth

This use continues to drive health care costs

Evidence-based Pricing Raises Revenue

and Decreases Utilization

The number of packs sold in MA decreased 59% from 547M in FY92 to 222M in FY10

State excise tax revenue from cigarettes increased 6% annually from FY92 to FY10

OTP (Other Tobacco Products)

Discussion, what are OTPs?

Closing the tax loophole

OTP use among adolescents:

From FY02 to FY10, revenue from the excise tax on smokeless tobacco increased 6% annually

From FY02 to FY10, revenue from the excise tax on cigars increased 18% annually

$1.25/pack increase + OTP Equalization $125 Million in new revenue An excise tax increase would also reduce

smoking and prevent key healthcare costs

* Source: Campaign for Tobacco-Free Kids 10.07.10 / Ann Boonn, May 6, 2011

Increasing tobacco excise taxes will:

Bolster Payment Reform by including a critical form of prevention and wellness

Generate significant revenue ($125 million)

Opportunity to fund tobacco control, health insurance programs, and small business relief