Georgia is threatening to reduce Medicaid reimbursements for hospitals when there is a sensible alternative.
• The State of Georgia is facing a budget shortfall in this current economic downturn, and Gov. Sonny Perdue and members of the General Assembly are threatening to make significant cuts to the state’s Medicaid program. This would jeopardize the financial stability of many hospitals in our state and significantly reduce medical coverage for thousands of Georgians.
• Georgia must contribute to the Medicaid fund in order to receive matching federal dollars. The governor initially proposed a 1.6 percent tax on all Georgia hospitals to pay for the state’s Medicaid deficit, but is now indicating that he no longer supports that measure. However, the Medicaid budget crisis still looms.
There is an alternative to cutting the budget: increase revenue to the Medicaid fund by placing a $1.00 hike on the state’s tobacco tax. Here’s why it make sense:
• Georgia has one of the lowest tobacco taxes in the U.S. Currently, Georgia is ranked 47th in tobacco taxes. The national average for a tobacco tax is $1.34 per pack; the Georgia tobacco tax is 37 cents per pack.
• Studies show that a $1.00 increase in the Georgia’s tobacco tax could raise $354 million for the state’s Medicaid program and draw another $1 billion in federal matching funds.
• This increased tobacco tax would only apply to 19.5 percent of Georgians. It is paid by people who choose to smoke. The Medicaid program currently spends $537 million annually in costs attributed to smoking-related illnesses.
• It is estimated that a $1.00 per pack increase means 49,100 adults will quit smoking and 79,600 kids will not become addicted smokers. Revenue will decline as smoking ceases—but so will costs to the healthcare system attributed to smoking-related illnesses.
• Smoking cessation results in improved health for Georgia citizens and enhances worker productivity.
What can you do to help? Contact your local state legislators and/or the governor’s office and tell them that you support an increase in the tobacco tax to fund the state Medicaid deficit. Go to www.howmanyreasons.org for contact information.
