Medicaid

The Problems with Medicaid:

Mississippi’s Division of Medicaid needs a deficit appropriation of $86 million to maintain services for FY 08 (ending June 30, 2008).

To continue current service levels, an additional $168 million is needed to fund Medicaid through FY 09.

Medicaid spends $264 million on tobacco related healthcare expenditures while the state’s excise tax on cigarettes only generates $43 million annually.
Mississippi has continued to use one time monies—the Healthcare Trust Fund or Federal aid—as temporary solutions to Medicaid’s funding woes. The state needs a steady source of revenue to fund the program on a long-term basis.

Lawmakers must find funding for this program that provides healthcare coverage for the poor and elderly or make cuts in beneficiaries or service. Approximately 100,000 beneficiaries would have to be cut from the program in order to close the budget gap. However, the last cuts in the Medicaid program resulted in an overwhelming public outcry and court intervention.


The Solution:

A $1.00 per pack cigarette tax increase would result in $163 million in new revenue that would go towards funding Medicaid.

43,000 kids alive today would not smoke as a result of $1.00 cigarette tax increase. Combined that with 23,400 adults who would quit smoking and Mississippi will save $971 million in long-term healthcare costs.

A $1.00 cigarette tax increase would provide a steady, predictable, and dedicated stream of revenue for Medicaid. Despite declines in smoking, each state that has raised its cigarette tax has seen an increase in revenue.

Increasing Mississippi’s cigarette tax—currently 18 cents and 49th in the nation—would end the state’s continuing healthcare subsidy for smokers. Medicaid spends $264 million on smoking related healthcare costs each year while the state’s excise tax on cigarettes only generates $43 million annually.