Effect of Higher Tobacco Tax Unclear
It is unclear what effect a measure on the Nov. 7 statewide ballot to increase the state tobacco tax by $2.60 would have on consumer behavior, the San Francisco Chronicle reports. The Legislative Analyst's Office said that most small or moderate increases in tobacco taxes reduce cigarette purchases (Gledhill, San Francisco Chronicle, 9/26).
About one-third of revenue from Proposition 86 would go to hospital emergency department operations and about 18% would be used to expand eligibility for Healthy Families, California's health insurance program for moderate- and low-income children (Schultz, Fresno Bee, 9/25). Funds also would be allocated to:
- Research on cancer and tobacco-related illnesses;
- Community clinics; and
- Nurse education.
According to the Chronicle, opponents of the measure characterize it as a "power grab by hospitals," noting that hospitals receive the largest percentage of revenue from the measure.
Carla Hass, a spokesperson for the No on 86 campaign, said, "If this were truly an effort to get people to stop smoking, more than 10% of the money would be earmarked for prevention and cessation programs" (San Francisco Chronicle, 9/26).
The measure would distribute funds to hospital EDs based on patient loads and levels of unreimbursed care (Fresno Bee, 9/25). Only hospitals that operate 24-hour EDs would be eligible for funds (San Francisco Chronicle, 9/26).
In addition, opponents of the measure say a provision that would allow hospitals to coordinate services with competitors could result in price fixing and other anticompetitive behavior (Fresno Bee, 9/25).
Hass said language in the initiative could be interpreted to permit hospitals to collude with one another and set employee wages or service charges.
However, supporters of the initiative say the provision is intended to help hospital EDs share the cost of keeping specialists on call (San Francisco Chronicle, 9/26).
In related news, health care advocates in the San Joaquin Valley say the measure could provide funds for local hospital EDs and children's health coverage, the Bee reports.
Community Medical Centers, the largest hospital chain in the region, would receive about $11 million annually from the measure, according to John Zelezny, senior vice president and a spokesperson for the hospital chain.
Proposition 86 would increase Healthy Families eligibility from 250% of the federal poverty level to 300% of the poverty level, regardless of immigration status. Eligibility for the program would increase by about 300,000 children, according to the California Budget Project, a not-for-profit group that advocates for low-income residents.
Dorinda Ohnstad, program director for the Children's Health Initiative for Fresno County, said the measure would affect 8,500 to 18,000 children in the county (Fresno Bee, 9/25).