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Projects / Publications / Issue briefs / HB13-1144 Taxes on cigarettes reduce smoking, improve public health and generate revenue for the state

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Issue briefs | Publications

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by

Date added

January 30, 2013

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Colorado budget | HB13-1144 | health | health care | policy | public health | taxes | tobacco

HB13-1144 Taxes on cigarettes reduce smoking, improve public health and generate revenue for the state

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A review of recent studies shows that cigarette consumption is closely tied to the price of cigarettes. In fact, one report found that even modest increases in the price of cigarettes will reduce consumption, especially among key demographic groups such as young adults.1 Given that taxes drive up the price of cigarettes, any measure that raises taxes on cigarettes would:
• decrease consumption as smokers cut back on the quantity consumed.
• further decrease consumption in the long term as fewer people pick up the now more expensive habit.
• improve individual and public health as fewer people smoke.
• produce savings for the state in the form of lower health care costs and greater productivity among workers.
Smoking is detrimental to nearly every facet of health
The Centers for Disease Control and Prevention (CDC) says cigarette smoking causes cancer, heart disease, strokes, lung diseases, and is the leading cause of preventable deaths worldwide. Furthermore, in the United States smoking accounts for about 1 in 5 deaths annually. This means that more than 440,000 people will die each year because of an addiction to cigarettes.2
Increased cigarette prices lead to decreased consumption
Numerous studies have explored the connection between the price of cigarettes and its effect on consumption. According to the Surgeon General’s report on tobacco use, a 10 percent increase in the price of cigarettes should lead to a 3 to 5 percent decrease in consumption in the developed world.3 Furthermore, people between the ages of 15 and 25 exhibit an even greater sensitivity to price than older smokers.4 This is important as the higher tax could create a barrier to youth and young adult smoking, meaning these young people will not get hooked in the first place. A decrease in consumption would create a healthier and happier workforce leading to lower health care costs, greater productivity and potentially a decrease in the rate of young adult smokers. Figure 1 plots the price of cigarettes versus the total number of packs sold nationwide over the past several decades. A strong inverse relationship is apparent, meaning that as the price of a pack of cigarettes increases, consumption declines.
 

Authors

by

Date added

January 30, 2013

Resource type

Issue briefs | Publications

Filed under

Colorado budget | HB13-1144 | health | health care | policy | public health | taxes | tobacco

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HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.