New Study Shows Higher Tobacco Taxes Greatly Reduce Youth Smoking

Health advocates today urged Illinois leaders to increase the cigarette tax by $1/pack following a new national study that confirms higher tobacco taxes are very effective at reducing smoking and other tobacco use, especially among kids.

The new study, conducted by researchers at the University of Illinois at Chicago, found that the large federal tobacco tax increase implemented on April 1, 2009, reduced the number of youth smokers by at least 220,000 and the number of youth smokeless tobacco users by at least 135,000 in the first two months alone.

The researchers emphasized that the study measured only the immediate impact of the tax increase through May 2009, and the number of youth prevented from smoking and using smokeless tobacco would be much larger over time.

The study showed that a large tobacco tax increase “can influence youth tobacco use prevalence within a very short time period,” the researchers wrote. “Adolescents not only respond to tax policy changes, but the speed of their response is fast. The prevalence of smoking and use of smokeless tobacco… dropped immediately following the tax increase in this study, and statistically significant and meaningful changes could be measured and detected within 30 days of the tax increase.”

In Illinois, health advocates are working to increase the cigarette tax by $1/pack to reduce further cuts to the Medicaid program.

“This study shows exactly why Illinois should increase the tobacco tax – because it will keep kids from smoking, encourage smokers to quit and save lives,” said Kathy Drea, Vice President, Advocacy for the American Lung Association in Illinois. “The tobacco companies are fighting the tobacco tax for the same reason – because they know it works and will reduce smoking. Illinois legislators should side with kids over Big Tobacco and increase the cigarette tax by $1 per pack.”

Health advocates say a higher tobacco tax is a win-win-win for Illinois – a health win that reduces smoking and save lives, a financial win that reliably raises revenue and a political win that polls show is popular with voters.

More Information on New Study

A 2009 law approved by Congress, the Children’s Health Insurance Program Reauthorization Act , increased the federal tax rate on cigarettes by 61.66 cents per pack (from 39 cents to $1.0066 per pack) and on moist snuff, the most common form of smokeless tobacco, by 92.5 cents per pound (from 58.5 cents to $1.51 per pound). Taxes were also increased on other forms of smokeless tobacco.

The new study investigated the changes in youth smoking and smokeless tobacco use rates following the April 2009 federal tobacco tax increases, using data from the Monitoring the Future survey, an annual national survey of 8th, 10th and 12th grade students. Because the survey is conducted from February through May each year, it coincided with the April 1 tobacco tax increase and provided an effective means to measure the immediate impact.

The study found that the tobacco tax increase had a substantial and immediate impact.

The percentage of students who reported smoking in the past 30 days dropped between 9.7 percent and 13.3 percent immediately following the tax increase, while the percentage who reported using smokeless tobacco dropped between 16 percent and 24 percent (because the survey asked about behavior in the past 30 days, the study used three different models, with different cutoff dates, to fully assess the impact of the tax increase).

Because of the tax increase, there were between 220,000 and 287,000 fewer current smokers and between 135,000 and 203,000 fewer smokeless tobacco users among middle and high school students in May 2009, the study estimated.

The study controlled for other factors that influence youth tobacco use, including individual, family and school characteristics as well as state tobacco control measures, including state cigarette taxes, smoke-free air polices and tobacco control funding.

The study also found that, even as youth tobacco use declined, federal tobacco tax revenues increased by 147 percent in the 12 months following the increase – from $7.1 billion in the 12 months before to $17.5 billion in the 12 months after.

The new study adds to the already overwhelming evidence, confirmed by the recently released Surgeon General’s report on tobacco, that higher tobacco taxes are one of the most effective ways to reduce smoking, especially among kids.

Tobacco use is the leading preventable cause of death in the United States, killing more than 400,000 people and costing the nation $96 billion in health care bills each year. In Illinois, tobacco use claims more than 16,600 lives each year and costs the state $4.1 billion annually in health care bills, including $1.8 billion in Medicaid payments alone.

Support for the study was provided by the Robert Wood Johnson Foundation and the National Cancer Institute. The study was published online by the National Bureau of Economic Research.

Kathy Drea, Vice President, Advocacy

American Lung Association in Illinois

A Helping Hand for Small Businesses: Health Insurance Tax Credits

The Affordable Care Act (ACA) established a tax credit to help small businesses provide health insurance for their employees. According to a new study released today from Families USA and the Small Business Majority, 3.2 million small businesses, employing 19.3 million Americans, will benefit from these tax credits. Out of the 198,910 small businesses in Illinois, 137,900 will be eligible for a small business tax credit—that’s 69.3%.

The cost of health insurance is often the prohibitive factor when it comes to coverage for small business employees. Whereas almost all businesses—99 percent—with 200 or more employees offer coverage for their workers, small business have a much lower rate: 71% of businesses with 10-24 workers, and 48% of businesses with fewer than 10 workers offered employee health coverage.

The small business tax credit is an integral part of the ACA – created in order to help small businesses provide coverage for their employees. The credit is designed to provide assistance to the smallest businesses that face the highest premiums. In order to qualify, all businesses must cover at least 50% of each employee’s health insurance.

• Businesses with up to 25 FTEs and average wages of less than $50,000 will receive credits on a sliding scale. To see if your business qualifies, go to the Small Business Majority Tax Calculator here. 

• Businesses with 10 or fewer employees and average wages of less than $25,000 are eligible for the maximum 35% tax credit.. 

• Non-profit businesses are eligible for a 25% refund. In 2014, when health care reform is in full-force, the tax credits will cover up to 50% of small businesses’ health coverage plans, and non-profits will receive a refund up to 35%. 

Unlike individuals, whom the ACA mandates to have coverage, small businesses are not mandated to provide coverage to their employees. However, if a business of 50 or more workers has an employee who receives an individual subsidy to cover the purchase of individual plan insurance, that business will be levied a fee.

What does the small business tax credit mean for Illinois small businesses and their employees? 

1,206,000 Illinoisans are employed at small businesses. Out of that number, 757,300 (62.8%) are employed at businesses that are eligible for a tax credit, making it easier for their employers to provide health coverage for them. Overall, the state will receive $634,615,800 in tax credits, or about $838 per employee, on average.

54,130 (39.3%) of Illinois small businesses will be eligible for the Maximum (35%) credit. 220,400 people will benefit from the maximum credits, or 29.1% of those employed by a small business.

The country suffers from large ethnic and racial disparities in health care, and coverage is no different in small businesses, where a disproportionate number of African American and Latino small business employees are without insurance, as compared to white, non-Latino employees. Many of these workers could benefit from the small business tax credit. In Illinois, 188,090 Latino workers are employed by small businesses. 74.5% (140,040) of those workers will benefit from small business tax credits. 118,310 African American, non-Latino workers are employed at small businesses, of which 78,170 (66.1%) will benefit from tax credits.

As with many other aspects of the Affordable Care Act, the small business tax credit is still underused and unknown. We found in our Neighborhood Stories series last year that many small business owners and chambers of commerce in the South and West Sides of Chicago had not heard of the small business tax credit. The Families USA and Small Business Majority Report released today will help to continue to publicize the availability of the credit.

A First for Illinois - Health Information Exchange Advocacy Day

On May 2, 2012, Illinois will hold its first Health Information Exchange Advocacy Day in Springfield; a day to educate healthcare professionals, providers, and patients on the opportunities for health information technology (HIT) to improve healthcare in Illinois.

What is HIT?
HIT utilizes computer networks to store, manage, and exchange health information, and provides a great opportunity to improve health care in Illinois and nationally. When providers have access to a patient’s complete health information, treatment decisions can be made more quickly and accurately, and duplicate tests can be avoided. These goals can only be realized if the available technologies are adopted and used by the health care industry, a barrier that has been addressed through education, outreach, and funding opportunities.

The importance of HIT to the future of health care in America has gained broad recognition and support, and has even bridged the political divide surrounding broader health reform and the Patient Protection and Affordable Care Act (ACA). Before enacting the ACA, President Obama took one of his first steps to reform the American health care system when he signed the Health Information Technology for Clinical Health Act (HITECH Act) into law in early 2009, as part of the stimulus bill, the American Recovery and Reinvestment Act. The HITECH Act aimed to increase the effectiveness and efficiency of health care, reduce costs, and increase overall access to health care by encouraging the use of HIT through the provision of financial incentives for the adoption and utilization of HIT, particularly electronic health records (EHR). The idea of employing HIT to improve the health care system was carried through in several provisions of the ACA which rely on a strong IT foundation, such as those related to accountable care organizations, health insurance exchanges, and government transparency.

What will you learn if you attend the HIE advocacy day?
The goals of this advocacy day are to:

• Explain the roles of the Illinois HIE and the Illinois Office of Health Information Technology (OHIT) and how the use of HIT will benefit healthcare providers and patients alike;
• Discuss the current HIE initiatives and legislative efforts; and 
• Provide resources and answer any questions about HIE.

Kimberly Baldwin-Stried Reich, President-Elect of Illinois Health Information Management Association (ILHIMA), explains further: "ILHIMA and GCCHIMSS, two Illinois professional health information management organizations, are partnering to bring you an outstanding educational session on the Illinois Health Information Exchange (HIE). Whether you are a patient, provider, consumer or health care professional, this event is especially for you! Join us to learn how the Illinois HIE will assist health care providers in Illinois to utilize technology to share health information with the goal of lowering health care costs, increasing patient safety and quality and improving care coordination and population health."

OHIT has already worked extensively in promoting the development of HIT in Illinois, and is integrally involved in the creation of the HIE with the Illinois Health Information Exchange Authority.

"We are very pleased to participate in Illinois' first Health Information Exchange Advocacy Day,” says Laura Zaremba, Director of OHIT. “This event will highlight the tremendous progress that Illinois is making in implementing health information technology to improve health care for patients and help build awareness of this vital work. The health information management professionals who comprise the membership of ILHIMA and GCC-HIMSS have been among the most active participants in Illinois' efforts to transform health care through technology and continue to demonstrate leadership in their sponsorship of HIE Advocacy Day."

The Illinois’ HIE will act as a centralized “hub,” facilitating the exchange of information from different health care facilities, state offices, insurance companies, labs, and pharmacies across the state. The goal is to pull a unique patient’s information from a number of sources and bring it all together to populate a single electronic health record (EHR) for the patient; a complete record of the patient’s health information that is accessible at any HIE participating facility. Illinois is making great strides in integrating HIT into its health care system. HIT has already improved the quality of care in rural Illinois; to read about this please see this month’s Illinois HIE Newsletter for Patients and Consumers, available in English and Spanish.

One lesson that you are sure to learn from the advocacy day tomorrow: HIT is transforming health care, and it is here to stay.

Amanda Swanson
LL.M. in Health Law Candidate
Loyola University Chicago School of Law

The Affordable Care Act: Dollars Flowing into Illinois

There’s no debating that Illinois could use some healthcare help. The state is ranked the 29th healthiest state—not the absolute bottom, but nowhere near the top. A recent poll also listed Illinois as the 31st most obese state and 25th for diabetes—not exactly stellar statistics. The same source noted that ,while Illinoisans benefit from high usage of early prenatal care and a comparative availability of primary care doctors, the state faces severe challenges, including prevalent binge drinking, high pollution levels, and a high rate of preventable hospitalizations.

These problems are not insurmountable. However, we all know the state is in a budget crisis. Governor Quinn has announced a plan to drastically reduce spending and raise revenues for Medicaid. We understand the state budget crisis, but obviously, people in Illinois need medical services, and the state is currently struggling to provide them.

Luckily, the Affordable Care Act is there to throw a lifeline out to health service providers and state agencies and especially to the real people who need healthcare. Thanks to the ACA, the states will spend about $90 billion less on healthcare with the implementation of the law than they would have spent without it. Thousands of people will still be getting the increased services mandated by the Act, but much of the funding will be federal rather than state.

It’s important to note that these benefits are not in the distant future; Illinoisans from birth to retirement are already benefiting from the Affordable Care Act.

Assistance from the ACA starts when kids are young; the ACA has already provided:

• $10.3 million for Maternal, Infant, and Early Childhood Home Visiting Programs. These programs bring health professionals into individual homes to connect families to the services they need to raise happy and healthy kids. These services include prenatal care, pediatric care, education, and parenting skills. 
• $191,000 for Family-to-Family Health Information Centers, organizations run by and for families with children with special health care needs.
• $4.9 million for expanding and improving school-based health centers. Illinois funds 38 school-based clinics that provide screenings, physicals, exams, and more to students.
• $555,000 to support the Personal Responsibility Education Program, which educates youth on abstinence and contraception to prevent teen pregnancy and sexually transmitted infections, including HIV/AIDS.

The ACA is also spending money putting people to work at improving healthcare! Illinois has received:

• $400,000 to support the National Health Service Corps, by assisting Illinois in repaying educational loans of health care professionals in return for their practice in health professional shortage areas. This program is designed to help medical, dental, and mental health providers who choose to work in needy communities to repay their student loans. This is a particularly critical program because these professionals provide medical and dental care that individuals desperately need; the program allows professionals to provide care to needy individuals without worrying about their reimbursement rates or their ability to pay back debt.
• $5.1 million for health professions workforce demonstration projects. This program is designed to supplement the workforce in areas that are either already short-staffed or expected to be in the future. The Illinois Workforce Investment Board’s report noted shortages of both registered nurses and licensed practical nurses in Illinois. 

And the ACA helps elderly Illinoisans, too!

• $457,000 to support Aging and Disability Resource Centers (ADRCs). ADRCs help seniors and people with disabilities understand long-term care options including community care. 

So far, Illinois has received $170.7 million in grants due to the Affordable Care Act. These grants are creating tangible improvements to the physical and fiscal health of our state. Thanks, Affordable Care Act!

This article, written by Caitlin Padula, was originally posted on The Sargent Shriver National Center on Poverty Law's blog, The Shriver Brief. 

New Report Shows Medicaid Cuts Will Hurt Illinois Economy

A new report from Families USA and the Campaign for Better Health Care shows that Governor Quinn’s proposed $2.7 billion one-year reduction in Medicaid spending would hurt “Illinois’ economy, its health care providers, and the Illinoisans who depend on Medicaid for health care.”

The report, released on April 25, emphasizes Medicaid cuts mean both lost jobs and lost business activity. For example, a 5 percent reduction in state Medicaid spending would jeopardize more than 7,000 jobs and cost the state about $923 million annually in business activity. A 10 percent reduction doubles those figures. Quinn’s proposed 18 percent cuts mean the potential loss of more than 25,000 jobs and more than $3.3 billion in lost business activity. Short-sighted cuts can have long-term negative effects on Illinois’ economy. 

“Just because Medicaid gets cut doesn’t mean that people will get any less sick or need any less medical care. With no source for preventive or primary care, patients will eventually end up in the emergency room with a more severe illness or complications,” notes Jim Duffett, Executive Director of the Campaign for Better Health Care. “Chronic conditions such as diabetes, high blood pressure and cardiac issues must be managed or the consequences can be fatal.” 

“Medicaid is not just a safety net. It helps strengthen families in tough times, and it provides security for the most vulnerable, such as our kids, who are the future. For those of us who have private insurance and think we are immune from drastic cuts and changes in the Medicaid Program, think again. Slashing eligibility and services will financially cost you and your family more than the political rhetoric of some who say gutting the program will save you money." Duffett explains, "The expanded cost to pay for uncompensated care is then passed on to consumers, employers, and businesses in the form of higher insurance premiums. It is estimated that, in 2008, family coverage cost $1,017 more because of higher premium charges (cost shifting) that resulted from passing along the costs of uncompensated care.” 

Illinois Hospital Association President & CEO Maryjane Wurth says that blunt cuts are devastating to patients and the entire health care system. “Drastic Medicaid cuts hurt everyone—not just the Medicaid patients. Hospitals will be forced to reduce jobs. Local businesses will be impacted. And hospitals will be forced to cut or eliminate medical services that everyone uses—there is not a separate set of staff, equipment and facilities just for Medicaid patients.” 

The cuts would be costly for the state as well, since Illinois receives slightly more than one dollar in federal matching funds for every dollar it spends on Medicaid. The federal match brings new money into the state that the state would not otherwise have. 

“We have workable solutions such as expanded coordinated care that will not compromise patient care,” says Wurth. “We have presented these multi-year proposals to members of the General Assembly and look forward to working with them to create a more effective Medicaid system. It’s important that Medicaid patients get the most efficient, high-quality care possible.” “The Governor’s proposed cut to Illinois’ Medicaid program is both cruelly insensitive and economically unsound,” said Ron Pollack, Executive Director of Families USA. “His proposal will deny the state more than a billion dollars in federal support, cost the state billions in economic activity, put tens of thousands of jobs at risk, and hurt the state’s most vulnerable families and senior citizens. For many reasons, this is the wrong direction for Illinois in these difficult economic times.” The report is available at www.cbhconline.org. 

 # # # 

About Families USA 

Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans. For more information, · www.familiesusa.org 

About the Illinois Campaign for Better Health Care 

We believe that accessible, affordable, quality health care is a basic human right for all people. The Campaign for Better Health Care is the state’s largest coalition representing over 300 diverse organizations, organizing to help create and advocate for an accessible, quality health care system for all. For more information, visit www.cbhconline.org. 

About the Illinois Hospital Association 

The Illinois Hospital Association, with offices in Naperville, Springfield and Washington, D.C., is an advocate for 200 hospitals and health systems and the patients and communities they serve. For more information, visit www.ihatoday.org.

The Economic Toll of Health Disparities

April is National Minority Health Month, and we are commemorating it with this post on health disparities from the Heartland Alliance blog, Heartbeat. The Affordable Care Act's reforms will make a difference in some of these disparities, such as the focus on expansion of access to primary care, innovations in medical delivery models, increased access to health insurance and the Medicaid expansion. 

Health disparities among minority groups account for 30.6% of direct medical expenditures, reflecting the significant toll being African-American, Asian or Hispanic has on one's health and economic well-being.

A study by the Joint Center for Political and Economic Studies found that between 2003 and 2006 almost a third of health care costs for minorities were due to poorer care compared with whites. Minorities face greater barriers to preventive care, acute treatment and chronic disease management.

Eliminating those disparities would have reduced by $229.4 billion direct medical expenditures by minorities, according to the Joint Center's estimate. Minorities could have saved more than $1 trillion on indirect costs -- such as those associated with illness and premature death -- during the four years studied if disparities didn't exist.

The 2010 National Healthcare Disparities Report found that rates of potentially avoidable hospitalizations for blacks are double those of whites. Blacks and Hispanics have higher rates of potentially avoidable hospitalizations for chronic conditions compared with whites.

Differences in access to care, provider biases, poor provider-patient communication and poor health literacy contribute to health disparities, according to the report. It states:
"Unfortunately, Americans too often do not receive care that they need, or they receive care that causes harms. Care can be delivered too late or without full consideration of a patient's preferences or values. Many times, our system of health care distributes services inefficiently and unevenly across populations."

Quoted in an America's Wire article on health disparities, Jennifer Ng'andu of the National Council of La Raza said minority children are particularly impacted by a lack of access to care. Children "will experience developmental setbacks because they are sick or their parents are sick. It makes it harder for them to achieve in school and can have serious consequences on their future."

Financial strains on families due to health care can hinder children's academic success and, in turn, future earnings. At the same time, minority youth are increasingly affected by chronic diseases such as diabetes.

Hispanics in general have higher rates of high blood pressure and obesity than non-Hispanic whites. They are twice as likely to die from diabetes as non-Hispanic whites, according to the Centers for Disease Control and Prevention.

Caring for chronic disease over a lifetime is expensive. With minorities representing more than half of uninsured Americans, the effect on their health and finances can be great. We support efforts to expand access to care -- particularly for preventive services -- to minority communities to eliminate health disparities and the economic costs that come with those disparities.

This article was originally posted on the Heartland Alliance Heartbeat blog. 

Let's Be Clear: this Cut Will Backfire

Many of the impending Illinois Medicaid cuts are short-sighted and will result in an increase in expenditures. This is particularly true for Medicaid community-living waiver programs that offer services for older adults and younger persons with disabilities.

A 2009 article in The Gerontologist showed that 2006 budget cuts to Michigan's state Medicaid community-living waiver program "were associated with increases in adverse outcomes: ER visits, hospitalizations, and permanent [nursing facility] placement." The study suggests that when we cut Medicaid waiver programs for persons with disabilities, these individuals cannot continue to live at home and require greater use of health services.

The Illinois legislature proposes changing the eligibility criteria for Medicaid community-living waiver programs, much like in Michigan. Let's be clear: this cut will backfire. It will ultimately cost the state more money through increased rates of hospitalization, ER visits and permanent nursing facility placement.

And I haven't even mentioned that there's more than balancing the state's budget at stake: in Olmstead v. L.C., the U.S. Supreme Court mandated a community-living option for all persons with disabilities. With three landmark lawsuits in Illinois recently settled under Olmstead (for mental health, developmental disabilities and physical disabilities), is the state of Illinois seeking to add a fourth lawsuit to the docket?

Kristen Pavle
Associate Director, Center for Long-Term Care Reform
Health & Medicine Policy Research Group


(Originally posted in the Chicago Tribune "Local Voices" here)