Gov. Mitch Daniels said he wants a healthier state and his proposed 25-cent tax increase on cigarettes is just one way he plans to protect young adults from the dangers of smoking, increase immunization rates among children and provide health care for uninsured Hoosiers.
"We are one of the least healthiest states in America," Daniels said Tuesday in a press conference at Ball Memorial Hospital.
Indiana has the second highest rate of smokers in the country, according to the Indiana State Department of Health. Daniels said the state will need to change that before progress can be made.
"There is no other strategy for making Indiana healthier that does not include reducing the second highest rate in America," Daniels said. "And there is certainly no other strategy for reducing the second highest rate of smoking in America that does not include a more expensive product."
Economist and Ball State University professor Patrick Barkey said he agrees with the governor's reasoning behind his decision to make cigarettes more expensive.
"Prices matter," Barkey said. "Raise the price of smoking, the rate of smokers decrease."
Daniels will ask the legislature to determine the exact amount of the cigarette tax increase when they convene again in January.
Money from the tax increase will provide smoking cessation and reduction campaigns aimed toward young smokers.
"We do know that particularly for young people there is a very direct effect of a more expensive product on a reduced number of kids starting or experimenting," Daniels said.
Rachel Ford, junior, said the governor's plan to increase the tax would be affective in reducing the number of young smokers.
"I think it will decrease the number of smokers that are college-aged or teenagers because they won't be able to afford it," she said.
Money raised by the tax will provide a health insurance program for about 120,000 low-income families, which Dr. Kent Bullis, director of the Amelia T. Wood Health Center, said might benefit some Ball State students.
"We have a lot of students that don't have insurance," Bullis said. "There is a misconception that students who can afford to go to college must have health insurance."
More than 550,000 people, or about 14 percent of Indiana's population, are estimated to not have health insurance, according to Census Bureau statistics.
All insured people are paying for the "charity" healthcare that uninsured people might receive and therefore this issue affects everyone, Daniels said.
Eligible participants of the insurance program will receive $500 annually to be used for preventive care, such as physicals. A Power Wellness Responsibility Account, or POWER account, will be used for medical costs like physician visits, prescriptions and diagnostic exams.
To provide coverage for 120,000 people, it would cost about $480,000. In addition to the cigarette tax increase, individual contributions, the Disproportionate Share Hospital Program and federal funds will also provide money for the governor's health initiatives. Smoking Reduction initiatives are expected to cost $24 million, while child immunizations are expected to cost $11 million. The remainder of the balance would go toward the coverage for the uninsured.
Barkey said the plan sounds good politically, but the idea to raise cigarette taxes to provide better healthcare has no relationship.
"What we tax and what we fund are separate," he said.
"Just because the plan is to spend all money from increased cigarette taxes on healthcare doesn't mean all the money will go there," Barkey said.
"It's not a criticism," he said. "As an economist, I'm not working for either side. It's just ear-marking of revenues is a side issue."
MARGINALIA
Where Indiana ranks:
- Second highest rate of smokers in America
- Third highest rate of cancer deaths
- 12th highest rate of heart disease
Mitch Daniel's Plan to Provide:
- Smoking reduction and cessation programs
- Immunization of children
- Coverage of uninsured with a POWER account
The POWER account will consist of $1,100 for a single adult and $2,200 for a family of four. Participants will be able to contribute no more than 5 percent of their income while the state will provide the rest. The participant would control his or her account and would be able to withdraw from the account if more than $500 remains. Also, the recommended preventive services must be completed to receive excess funds.
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