Steve Law, reporter for the Salem Statesman-Journal, has written a great article separating fact from fiction around Measure 50, the Healthy Kids Plan funding measure.

This is another example of that newspaper’s excellent coverage of state issues.

The article can be found online here and I’ve quoted it below.

Answers clear the smoke around ad campaigns for Measure 50

STEVE LAW
Statesman Journal

October 26, 2007

Perplexed by the dueling ads on TV, radio and mailers about Measure 50, the tobacco tax increase to pay for the Healthy Kids Program?

Here’s a handy guide to sort out the issues swirling around the campaign.

What is the Healthy Kids Program?

A proposal by Gov. Ted Kulongoski and Democratic lawmakers to raise tobacco taxes and use the cash to offer health care coverage to more than 100,000 uninsured children, teenagers and some young adults. The money also will bolster campaigns to prevent smoking and help people quit and to expand rural health care.

Will it insure 10,000 more low-income adults under the Oregon Health Plan, as backers claim?

Maybe. Lawmakers hope to expand coverage to adults with surplus money expected in the early years of the program. But there’s no guarantees that 10,000 more adults will get covered, said Bruce Goldberg, executive director of the Oregon Department of Human Services. And there’s no guarantees the funding will be available after the first few years.

What will Measure 50 cost smokers?

State cigarette taxes would rise 72 percent, or 84.5 cents per pack. That takes the current state tax from $1.18 per pack to almost $2.03 per pack, tied with Washington for third-highest in the nation. State taxes for pipe tobacco, roll-your-own and chewing tobacco would rise 46 percent. The tax on cigars would rise up to 46 percent, with an existing 50-cent cap per stogie remaining in place. Retailers will decide how much of the taxes to pass on to customers.

How much money does it raise?

The state expects to collect $147 million in additional tobacco taxes in 2007-09 and $208 million in 2009-11, after adjusting for reduced sales because of rising prices.

Are those tobacco company ads true that say most of the money won’t go to children’s health care?

Not really. Of the $355 million in net new money raised by mid-2011, Senate Bill 3 directs that $312 million goes to the Healthy Kids Program Fund, according to the nonpartisan Legislative Fiscal Office. An additional $27 million goes to tobacco-use reduction campaigns. Most of the rest goes to rural health care programs, community health centers and safety net clinics, to care for underserved or vulnerable people.

Can that money be diverted to other programs?

Yes, but Measure 50 amends the Oregon Constitution to specify that proceeds only can be used for “providing health care to children, low-income adults and other medically underserved Oregonians and to tobacco-use prevention and education.” In the early years, tobacco taxes will flow in faster than needed because it takes time to create a program and sign up children for health coverage. Lawmakers could spend some of the surplus on low-income adults or set it all aside to cover future rising costs of the Healthy Kids Program.

Will the higher tobacco taxes be enough to pay for this program in the long run?

Probably not. Health care costs keep rising, while smoking will decline as a result of Measure 50, so future tobacco taxes won’t grow as fast. The state could get money from the proposed expansion of a federal program for children’s health care or could seek other funds to sustain the program.

Will people really quit smoking as a result of this measure?

Yes. Experience shows that higher-priced cigarettes cause people to quit, especially younger smokers. The Campaign for Tobacco-Free Kids estimates the tax increase will prevent 29,000 Oregon youths from getting addicted to smoking, prompt 15,400 adults to quit smoking, and during five years, cause 3,800 pregnant women to refrain from smoking. In addition, the anti-tobacco campaigns bolstered by Measure 50 would further reduce smoking.

Why keep punishing smokers, especially low-income smokers?

It’s easier to pass a tax that someone else pays, and only one-fifth of Oregon adults smoke cigarettes. Supporters argue that smokers will be helped if they are encouraged to quit smoking. An estimated 13,400 people will not die from smoking-related illnesses if Measure 50 passes, the Campaign for Tobacco-Free Kids estimated. Studies also show that smokers put a far greater burden on health care costs than they cover through tobacco taxes.

Why amend the Oregon Constitution to do all this?

House Republicans held tight to deny Democrats the necessary 60 percent supermajority needed to pass the tax increase outright or place it before voters as a statute. A quirk allows lawmakers to put constitutional amendments before voters with a simple majority, and Democrats reluctantly went that route.

Is it unprecedented to put something like this in the Oregon Constitution?

Not really. Oregonians can change their constitution with a simple majority vote, making it far easier to amend than the U.S. Constitution. Because of the wide-open initiative system, it’s relatively easy to put amendments before voters. In this decade alone, Oregon ballots have included 42 proposed constitutional amendments. Topics included a gay-marriage ban, authorizing use of gas taxes for state troopers, zoning of strip clubs, union payroll deductions for political purposes, unionizing home-care workers, bonds for earthquake safety and mobile home taxes, among other issues.

Can many of these children qualify for health coverage already, in other programs?

Yes. About 60,000 of the state’s uninsured children qualify for subsidized health insurance. However, there’s no money to serve them and no money to conduct the outreach needed to sign them up. Those funds would be available in the Healthy Kids Program. Also, children could re-enroll in the new plan every year, instead of every six months, as now. That will prevent many children from losing coverage.

Is this being proposed by HMOs and health insurers?

No, but they are part of a broad coalition supporting the measure. The American Cancer Society is the largest campaign donor by far, with $893,000 reported as of Oct. 22. The political action committee for the Yes on 50 campaign is controlled by representatives from the cancer society, the hospitals/health insurers trade group and the doctors’ trade group. Among campaign donors of $100,000 or more, there are four from the industry (Providence Health System, Regence BlueCross, Kaiser Health Plans and the Oregon Association of Hospitals and Health Systems); two public employee unions (Oregon Education Association and Service Employees International Union); two businessmen (Phil Knight, Win McCormack); the cancer society and American Heart Association; and a political committee controlled by Gov. Ted Kulongoski.

Who is backing the opposition campaign?

Philip Morris and Reynolds tobacco companies, with record-setting spending. Philip Morris and its corporate parent put up $5.8 million as of Oct. 22; Reynolds put up $4.3 million.

Are tobacco companies correct to say this creates a big new state bureaucracy, and there’ll be no competitive bidding among health providers to serve the children?

No and no. The state will use the existing Oregon Health Plan program and existing Office of Private Health Partnerships to administer the program, Goldberg said. Some new staff will be hired to enroll and serve 100,000 new children in the plan. Any health care company wishing to provide coverage for the children may do so, if they meet the payment terms of the state, Goldberg said.

slaw@StatesmanJournal.com or (503) 399-6615

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