South Dakota, like many other states, faces increased Medicaid costs as the recession kicks more people out of their jobs and their health insurance. One way to cut those Medicaid costs may be to spend more on programs to fight smoking.
Marci Greenstein at Understanding Government reminds us that tobacco prevention is an excellent example of how government can spend a little to save a lot. She points to a New York Times report on the success of a Massachusetts program that uses Medicaid to deliver stop-smoking treatment. In two and a half years, Massachusetts got 30,000 poor residents to kick the habit. That's 30,000 people charging fewer heart attacks, asthma attacks, and childbirth complications to Medicaid. Nationwide, says NYT, 11% of Medicaid spending, $22 billion, goes toward smoking-related illnesses.
States have a big pot of money—$25 billion in tobacco taxes and the $246 billion tobacco settlement from 1998—to spend on tobacco prevention. Unfortunately, according to the Campaign for Tobacco-Free Kids, the states are spending only 2.3% of their tobacco tax revenues on programs to help folks kick the habit. For every meager dollar the states do spend in that direction, the tobacco industry spends $20 to promote more smoking. (Ah, the free market, always working for the common good....)
South Dakota is doing better than most states, ranking tenth on CTFK's scoring of state effort on tobacco prevention. Our current budget allocates $6 million for anti-tobacco programs. Alas, that's not quite 53% of what the CDC recommends we should be spending. Our neighbors in North Dakota are the only state meeting that standard, spending $9.4 million on anti-tobacco programs, narrowly exceeding the CDC's recommendation.
South Dakota, like most states, is siphoning off the tobacco settlement funds to avoid making tough choices in other budget areas. The Republicans in Pierre voted for a budget this year to transfer the entire education enhancement tobacco tax fund to the general fund. The first $30 million of our cigarette tax goes straight to the general fund, and a sizable portion of revenue above that goes to property tax reduction instead of targeting tobacco use. Governor Rounds's FY2011 budget includes a $461,000 increase in tobacco prevention funding, but that's all federal stimulus money.
Governor Rounds has identified Medicaid as one of the areas driving big cost increases for our state budget. Maybe he should look at pulling some of the tobacco tax fund back to prevention programs. CTFK notes that California has spent $1.8 billion over 15 years on the nation's longest-running tobacco prevention program. That investment has produced savings of $86 billion in health care costs for everyone in California. Hmm... show me another program that produces a 50-to-1 return on investment, and you've got my vote.
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