The Senate passes an expansion of SCHIP, proposing to extend health care to millions more kids. This includes the expansion funded by a cigarette tax hike. (Liddy Dole responded (not in so many words) that this would be a regressive tax hike, since a lot of poor folks smoke. Think about that — “We can’t possibly make folks pay more for their cigarettes so that their kids can get health care!!” Nutty.) And, the Senate would seem to have a veto-proof majority, for now.
There’s still a lot of wrangling to be done in conference committee, but the general political consensus is clear — because the intent of the legislation is clear: Cover the kids. People don’t seem to mind an increased government role in achieving that goal. I hope this point is not missed by our terribly clever political analysts.
For all that this is touted as a bipartisan achievement, Democrats would be smart to take the offense on this kind of legislation going forward — especially against inert tobacco shills like Dole. Aside from the patently misanthropic Bush administration, who could object to health care for kids? Who doesn’t love kids? Sometimes it really is about the children.
Then again, who doesn’t love Mom? What about her insurance? That’s next. Everyone knows it. The progressives are right on that question, too. Dare I say it — Viva incrementalism!
bob-neer says
Sounds like a winning combination to me. Republicans have already lost one election with the weight of Iraq on their shoulders. They are about to be dragged down into a decided minority in 2008 on the same issue. If they vote for smoking and against health care for children now, they really need to have their heads examined.
dolph says
A few points:
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First, Massachusetts invented the win-win combination of raising tobacco taxes and using the revenue to cover kids. That was the formula for the 1996 McDonough-Montigny health reform bill. McDonough went to Sen. Kennedy with the idea, and Kennedy went to Orrin Hatch, who signed on to the plan. The original 1997 SCHIP bill was funded in part by a federal cigarette tax increase.
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Second, cigarette tax increases are not regressive. Because poor people are more price-sensitve, they are more likely to reduce or quit smoking in response to a price increase. Thus the benefits of cigarette tax increase fall disproportionately on lower-income people. If a low-income person stops smoking, the economic benefit is substantial. And of course, the health benefit is even greater. These arguments are spelled out more thoroughly here: http://tobaccofreeki…
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Finally, it’s time for Massachusetts to think about increasing its tobacco taxes, to help pay for our current health reform. We’ve slipped to 13th nationally, behind Vermont, Maine, Rhode Island and CT. New York City’s tax is double ours. Its good for health and a reliable source of revenue.
stomv says
so I followed the link, and then checked out their source:
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Response to Increases in Cigarette Prices by Race/Ethnicity, Income, and Age Groups — United States, 1976-1993, as compiled by the CDC with data from the NHIS. Check out this graph:
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Holy snikes, batman! Young people and [statistically, based on race] poor people are more likely to cut back smoking with an increase in price!
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It’s a balance. On the one hand, those who do quit because of increased prices both (a) live healthier lives and (b) have more pocket money because they’re no longer buying smokes. On the other hand, those who don’t quit in spite of the increased prices have less money… and since the number of cigarettes smoked doesn’t increase linearly with income, it’s by definition regressive.
milo200 says
Maybe this is naive to ask, but what happens if the anti-smoking movement achieves considerable success in lowering the number of current and new smokers, and society starts to really shift and view smoking as vile? How will we cover people then?
gary says
Like earned income.
stomv says
With all the money the US health care system will be saving from not treating cancers of the lungs, throat, mouth, etc., not to mention the reduction in respiratory infections, asthma, and so on, not to mention the reduced bankruptcies brought on by the enormous medical bills or unplanned early retirements, not to mention the additional cash in the pockets of those on the edge of needing social safety nets, I’d bet we could find the money elsewhere.
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Dramatically reducing smoking will result in systems savings all over the country.
laurel says
AT the risk of being branded a shill for Big Tobacco and dumped in a stinkin pile with Libby Dole, I am uncomfortable with ever increasing taxes on tobacco to fund, oh, just about everything it seems.
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If smoking were a purely voluntary vice, like eating Brussels sprouts, then I might agree. But it’s not. Everyone knows that tobacco is addictive. Some people can cut down and/or quit, but many can’t. It is not fair to allow an addictive substance to be marketed, then heavily tax the addicts.
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Disclaimer: I abhor smoking and never have and never will.
jimc says
I agree, smoking taxes are problematic. But if you taxed the companies, they would just pass it on to their customers anyway.
laurel says
how about putting a profit cap on companies that sell addictive drugs over the counter? this would prevent what you foresee. something similar has been done with utilities in the past, iirc (and i may not).
jimc says
I considered addressing the addictive aspect in more detail, not to mention someone’s observation that the FDA would never approve tobacco these days – but I think we have to let it go. Tobacco is an old, old business, and it’s here to stay. We just have to keep up the social pressure so kids don’t take it up.
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gary says
If they’re so damn evil, just ban them.
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Course that would stop the tax that pays for the children.
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Maybe a government campaign to encourage smoking: LIGHT UP. DO IT FOR THE KIDS!
annem says
a 1 payer – The Gov’t – with private delivery of services national healthcare program; this 1 payer would be funded by collecting monies from two sources:
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An employer payroll tax which would be, on average, lower amounts than most employers pay for health insurance now. It would be a stable and predictable amount which is something that’s very important for running a business.
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and
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A healthcare-dedicated portion of income tax, and maybe some portion of “sin taxes”. Everybody pays in a fair share.
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Most health policy experts, joined by members of the public who stop to think logically about it, agree that this wholesale reform approach is much more rational — more effective and sustainable, too — than the absurd incrementalism of tobacco taxes for gradual expansion of coverage to kids. We’ll be doing incrementalism into eternity with this approach.
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Hmmm, whose interests are served by keeping us busy doing incrementalism into eternity?
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And don’t try and sell me on the logic on holding out hopes that since kids ore so politically popular than maybe their Moms will become so also. And then their aunts, and then…
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This is a human rights issue, a clinical and public health issue, and an economic rights issue for THE ENTIRE COUNTRY.
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Then why is the Democratic Party’s leadership and the rank and file so dismally absent on speaking out against the inherent failure of incrementalism and standing up for improved Medicare For All, HR 676 ?
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(hint: $$$$) learn more and take action at SickoCure.org
stomv says
but disagree on how to get there.
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I think that incrementalism will work, in the same way that a drug dealer gives you a taste for free. Once more people see that (a) a nationalized health care system helped them tremendously, and (b) that they’re going to lose that health care when they age out, there’ll become allies in the fight to expand health care coverage to all.
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It’s far easier to ignore the problem if you’ve never gotten a taste of the solution. Once you’ve had that taste of government provided health care regardless of ability to pay, you’re not going to want to give it back. That’s how we’ll win.
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This doesn’t mean that we can’t try to do both approaches at the same time. We should, and I expect we will. But, if a few kiddos and moms get the health care they need in the mean time, I’m sure not going to fight against it.
laurel says
perhaps the likelihood of a price cap or some other fix is not high. however, change will never happen without pitching some new ideas. i’m sorry to see you capitulate so easily with a “they’re gonna railroad us, we might as well enjoy the feel of the tracks” attitude. or have i mis-read your comment?
jimc says
But let’s assume for the moment that I do — capping profits on utilities is passable because we all pay for utilities and couldn’t survive without them. The public interest overwhelms the profit interest. But capping profits on a private business is not likely to fly, in my view. I don’t mean to say the idea is not worth trying — well, I guess I do mean that, but I wouldn’t knock anyone who tried it.
laurel says
if we’re going to allow for-profit over the counter sales of addictive drugs and then tax the addicts who buy them, then i’m saying we should limit the allowable profit. you said that if we tax the tobacco companies, they will in turn just raise the price of tobacco. yep, probably true. but what if we freeze prices and say that x% of current profits go directly to the federal health care funding pot? some tobacco investors will ditch tobacco because profit margins aren’t as wide as they like (similar to what is happening now in the newspaper industry). but some will stay because there is still guaranteed profit there. after all, their customers are addicts.
jimc says
Thanks for clarifying.
bostonshepherd says
This applies to ALL corporations. They ALWAYS pass the added tax burdens to the consumer.
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Which is why “taxing evil corporations” is nonsense. But always a progressive favorite.
stomv says
Unless the demand curve for the item is perfectly horizontal [say, the one and only heart medicine that would keep you alive], businesses can not pass the entirety of the tax on to customers. Well, they can, but they won’t.
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As long as the supply and demand curves are neither sloped 0 or infinity [as in, “normal products”], when there’s an artificial price increase at all quantity levels like a tax of $T, the price will go up by $I < $T. The consumer now pays an extra $I for the product, and the producer makes $T-$I less profits.
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This is Econ 101, and it really happens this way. Hundreds of data-based experiments in many different countries have shown that the theory holds up in practice.
You might point out that due to cigarettes addictive nature, the slope is 0. I agree that it’s flatter than many products, but it’s not 0 — there are people who have quit, partially induced by the high price. Furthermore, high priced cigarettes serve as a barrier to make it harder for children [pre-job aged] from starting in the first place.
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You might also point out [correctly?!] that there is a price floor for cigarettes, and that floor is above the profit line for cigarettes, which means that with enough tax the company would want to reduce the pre-tax price to below that floor. I don’t know if the numbers support it, but it is a valid point. In that case, the customer would be paying the full burden of the price of the tax, but the producer would be paying the burden of lower profits since the price was sub-optimal [too high, and hence “too many” people quitting].
charley-on-the-mta says
Jes’ kiddin’.
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Seriously — of course you’re right that it’s addictive, and it’s not as easy to give up as, say, doughnuts. Or maybe it is. In any event, people can and do quit, the tax gives an extra incentive to do so, and apparently it really does work that way.
gary says
Let’s see. Right now, 45% of American children are insured through Medicaid or SCHIP. But sure, of all the things the government must buy, we now must provide free insurance for the kids in a family earning $82,600.
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Wow, who’d have thought that a welfare family could earn $80K?
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Great marketing though. I’ll hand it to you. Who wouldn’t support it? It’s got all the aspects of a great
socialist propaganda campaignprogram: Sell the American public on the free stuff, evil tobacco and cute smiley kids. And, all this for only $60 billion.jimc says
My wife and I together make more than $80K, and if my employer didn’t pay for 80% of our insurance coverage, we’d be screwed.
gary says
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There. Fixed.
bostonshepherd says
Well done.
jimc says
It’s so clear to me now — the free market will save us all. And the 45 million Americans without health insurance are opting out because they chose to, or are too lazy to earn basic health coverage.
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A peaceful weekend to all.
annem says
also, don’t forget the 100’s of thousands with crappy health insurance coverage…
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If you’re not familiar with this uniquely American phenomenon. please go see the film SiCKO
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To view clips and find out where it’s showing near you, visit http://www.SiCKO-themovie.com
stomv says
Most recently in this post.
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It’s a slam dunk, and I don’t care if the kid’s parents are making a million dollars a year. This isn’t about a safety net; this is about making sure all kids are safe, regardless of what their parents do for a living or what they choose to do with the money.
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You want universal health care? Start providing health care to more people in the same age group, and watch the clamoring when people age out and then get sick.
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The next thing I’d do after SCHIP expansion — just cover 100% of all health needs relating to pregnant woman and newborns. Period. Teeny deductibles to force people to think about their actions, and then full coverage, no questions asked. If people want supplemental coverage from their insurance company, that’s fine… we like more coverage, it leads to more good health. But, pick a base line and cover all pregnant women.
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* For progressives, it means a fairness for those who are most vulnerable.
* For conservatives, it means one fewer reason/excuse to get an abortion, not to mention that many more potential moms who see images of their baby on their computer, thereby strengthening their resolve to carry the baby to term.
* For all Americans, it means better health outcomes: those who weren’t getting enough care before will, thereby reducing the probability of life long problems that burden the system. For those who are getting good health care now, you’ll be able to argue for even better supplemental care since the basic costs have been taken off of the rolls for your insurance company.
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Lots of people have babies. We’ve all got a momma. It’d be hard to lead the fight against mommas and babies.
annem says
well intended, but mistaken.
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“It’d be hard to lead the fight against mommas and babies.”
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Not as hard as you might wish.
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Multiple states across the nation have been slashing subsidized insurance to these very groups.
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Why do we continue to put so much energy and resources from the so-called progressive community and our organizations fighting for piecemeal improvements in such a god awful F’ed up healthcare system?
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Where’s the courage to stand up and demand what is right?
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We need a modern day MLK Jr. and an Eleanor Roosevelt.
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Desperately.
annem says
but, c’mon, people. We really can do much better than this piecemeal inadequate approach.
stomv says
to provide government health care to all adults.
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It’s far more obvious that it’s right to provide government health care to all minors. They don’t have the ability to earn their own care, and they had no influence on their current state of health. They’re minors.
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Is it right to let someone suffer because of his own shortcomings/bad decisions? Unclear. Is it right to let someone suffer through no fault of his own, because he’s a child and his parents’ shortcomings/bad decisions? No.
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I know — and if they’re successful before we get a critical mass of people who’ve personally felt the benefits of government provided health care, we’re back to square one. If, on the other hand, we can get enough people who have personally benefited and then no longer have access, we’ll win.
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The way to get there in my opinion: pick an age group [say, unborn to 2 years old] and cover 100% of those children — even the mega rich ones. Tweak the system and make necessary changes, gaining efficiency. Make it work. Then expand the age group, as quickly as possible without sacrificing quality or efficiency.
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By covering everybody, it prevents the semi-irrational instinct of “that’s only for poor people; it will never help me” excuse to not take up the fight. Make it everyone’s, if only for a small part of their life. They’ll take ownership and fight to preserve and expand it.
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As an added bonus, it’s far less disruptive to lots of industries and processes already in place. There’s somethign to be said for that too.
annem says
The immense wealth, power and political influence/control that these HC industries have in the U.S. at present will never let such creeping expansions continue. They will crush them. Just as the leaders of these industries have helped to beat back the coverage expansions that were hard fought and sometimes won. Only to be taken away.
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No thanks.
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2 steps forward and then 3 steps back, or vice versa, year after year, decade after decade, no thanks. Not on my watch. Not while I’m a nurse who has taken a professional oath to advocate for my patients and for my community.
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And it shouldn’t take being a nurse but that’s part of who I am so I’ll own it.
stomv says
You’re rolling in other legislative action with this one, and holding a grudge against this one as a result of other action.
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This is a step forward. More people will be able to seek and obtain medical care because of this bill. How can you complain about a step forward?
annem says
But I did intimate that it constitutes incrementalism, and it does, even though it’s major incrementalism.
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And it’s our responsibility as citizens (who are in large measure getting royally screwed by the current healthcare “system”) to demand much more than this SCHIP expansion.
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One doesn’t preclude the other.
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That’s what I was trying to say.
stomv says
Can a state raise the age to 21? They wouldn’t even have to “take away” anyone’s legal right to smoke… just pick a date and have it the three year interim date. For example:
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Pre Jan 1, 2008: 18+
1/1/08–12/31/10: born before Jan 1, 2008
Post Jan 1, 2011: 21+
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Why not? If smoking is so bad [and it is] and if the problem is that kids younger than 18 are getting hooked [they are] why not raise the age to 21? Most 15 year olds know an 18 year old — they go to high school together. Few 15 year olds know 21 year olds well enough to get them to buy ’em smokes.
annem says
After 3 years of actively trying. Damn it was hard.
melanie says
it should have gone alot further and by rolling back medicare subsidies not another cig tax, although I see upstream that actually does lead to less poor/young people smoking. In the long run, funding will probably be revisited.
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The reason I like this is because it is a big step towards UHC that is a winning frame against an ideology that would argue against government funded health care. Bob Novak wrote an excellent piece on this:
http://www.realclear…
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Of course he is against it. But I was actually heartened by what he had to say.
raj says
…as far as I can tell, this “increase the tobacco tax to provide for a new (or increased) spending program” is nothing more than a subterfuge. IIRC, the US Senate rules require the Senate to provide for a funding source for the new (or increased) spending. But, the funding is really not limited to the “earmarked” funding source, the funding really comes from the general revenues. And so if, in subsequent years the “earmarked” funding source dries up (say, if cigarettes are banned) the funding for the program is not cut, it continues to come from general revenues.
charley-on-the-mta says
Really? Some crystal ball you’ve got there.
stomv says
but total cigarettes sold in the United States could drop by a sizable percentage over the next x years…
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I’d love to see it, and don’t think it would be a problem to begin taking the funds from the general revenue. After all, the savings from avoided health care, avoided sick days, etc could very well more than make up for the lost cigarette tax revenue.
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Still, it’s a valid point methinks, banned or merely reduced.
raj says
…note that I wrote “if.” The phrase was obviously in the subjunctive, not the declaratory.
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I’m sure that you know the difference.
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No, they aren’t going to ban cigarettes. But, if they did, their putative “funding source” would dry up. And that is why this “pay for” scheme is a fraud. The putative funding source would go away, but there would be a continuing claim for funds from the general revenues. And that was the point.