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More Health Insurance for US Poor via Cigarette Tax

UPDATE 7:27pm: The White House has indicated that the President will veto this legislation, citing the cigarette tax increase as an unacceptable way to fund the increased spending.

Tony Fratto, a White House spokesman, said yesterday that Bush's senior advisers "will certainly recommend a veto" of the Senate committee's proposal because of its size and the plan to fund it with a tax increase.

"It's important that Congress understands the serious consequences of delaying this or sending the president legislation that he clearly cannot sign," Fratto said.

Bush wants to use tax credits, rather than a tax increase, to extend health insurance benefits.

The president has sought to revive his idea of replacing the long-standing tax break for job-based health insurance with a new tax deduction that would help people pay for insurance regardless of whether they get it through their jobs or on their own.

But Democrats in Congress have shown no interest in it, even after Bush said last month that he would consider a new tax credit to help lower-income people buy private insurance.

Republican Sens. Charles E. Grassley (Iowa) and Orrin G. Hatch (Utah), who helped broker the deal in the Senate Finance Committee, issued a joint statement last week calling Bush's tax code proposals "not realistic" and urging the president not to veto the $35 billion package if it reaches his desk.

"What the administration needs to understand is that if a bipartisan plan isn't achieved, then the Democratic-controlled Congress will, at the very least, extend the current program with all the terrible policy provisions that have evolved, such as waivers for childless adults and coverage for higher-income kids," the senators said.

Original post begins below:

More Health Insurance for US Poor via Cigarette Tax

This extension of health insurance to more Americans, forged through bipartisan efforts, applies to "gap" families -- those who can't afford insurance on their own, and who have incomes too high to qualify for Medicaid.

Lawmakers in a key Senate committee brokered a bipartisan agreement Friday that they said would extend health insurance to an additional 3.3 million low-income children in the U.S.

The legislation would add $35 billion over the next five years to a program that subsidizes health coverage for families with incomes too high to qualify for Medicaid but too low to afford insurance on their own. The increased funding would be paid for through a 61-cent increase in the federal excise tax on a pack of cigarettes.

Many of the details of the package were not available, but the lawmakers issued a joint press release Friday night announcing their agreement.

"The State Children's Health Insurance Program has helped millions upon millions of low-income, uninsured American kids see doctors when they're sick, and this agreement will make sure that even more children get the health care they need," said Max Baucus, D-Mont., chairman of the Senate Finance Committee, which will take up the measure next week.

Democrats had been hoping to add $50 billion instead of just $35 billion:

Democrats originally proposed adding $50 billion over five years, which would bring total spending to $75 billion. The Bush administration proposed adding $5 billion to the program over the next five years _ on top of the $25 billion available under current spending levels.

Republicans whittled away at some of the proposed spending. They said the agreement reached late Friday would also refocus the program on low-income children. They were critical of Bush administration waivers that allowed hundreds of thousands of adults to participate.

More help for poor families without health insurance is in the works:

Rep. Diana DeGette, D-Colo, said House Democrats will push for more funding than what the Senate Finance Committee leaders proposed.

"I've been talking to a lot of my colleagues," said DeGette, a member of the House Energy and Commerce Committee "They want to find a way to get $50 billion."

She said the extra money would make it easier to increase enrollment among the millions of children eligible for Medicaid or SCHIP but currently not enrolled.

She said that House Democrats would also look to higher tobacco taxes to pay for the funding increase, but they do not plan to rely solely on a tobacco tax. The bill would also reduce payments to some private insurance plans that provide health coverage through a program called Medicare Advantage, she said.

Also, while the Senate bill focuses only on children's health insurance, House Democrats intend to broaden the scope of their legislation. It will ensure that physicians who care for Medicare patients don't get a 10 percent cut in their reimbursement rates next year, she said. The legislation will also probably make changes to the Medicare drug benefit, making it easier for some low-income seniors to qualify for a larger government subsidy.

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» New Roundup: Health Care Battle from Wizbang Blue
The bipartisan effort to reauthorize and expand the State Children's Health Insurance Program (SCHIP) is moving forward despite the roadblocks ahead. The White House has promised a veto, and the Republicans in the House have promised to stand united ag... [Read More]

Comments (6)

Paul Hamilton:

We need universal healthcare. No compromise.


Typical Democratic BS. MORE TAXES. This time, tax 25% of the citizens, which is those who smoke.

Why not tax all married people for sex? Hell, the demo's would like to have everyone turn their paychecks over to them and they will take care of you.

I, and millions of other people, have decided we are not responsible for the lazy bastards who won't work. So quit raising taxes, start cutting waste in the gov't!

Smokers have caused me so many painful ear infections, bloody sinus infections and other physical injuries with their darn secondhand smoke this past month and year, that I'm downright angry about it. Just yesterday I caught just two breaths in public places from others of second hand smoke and my ears and mouth are still burning today, and I'm still very uncomfortable and angry about it. My mother has both asthma and emphysema caused by secondhand smoke to her lungs and must now pay about $800 in medication to barely stay alive each month. No tobacco company or smoker has stepped forth like a man to pay for the injury they have caused to her. Philip Morris even admits on their website that secondhand smoke fatally poisons small babies and causes their death with SIDS. If this company was run by real men, they would stop injuring babies for a profit. No good person would profit from such a thing.

Compared to suing smokers and their tobacco company drug pushers to cover their serious injuries to nonsmokers created by their deadly drug addiction and profiteering, a small tax to pay for just a part of their injury and murder of nonsmokers is a very small price for these selfish drug addicts and drug pushers to pay.

Unlike any other sort of drug addiction, smoking specifically injures and can eventually kill persons far beyond the intended user. I can't understand how this can be legal under the law. A small tax to cover a fraction of their harm and injury is only a start to reforming this serious public health problem. This is only another issue where Mr. Bush acts like a coward and wessel to the big business concerns.

Some estimates are that smoking and drinking related injuries and diseases account for up to 40% of all hospital bed stays and drive up emergency room and other health costs by billions each year. Making the tobacco companies pay part of their fair share for the amount of injury they cost U.S. society is only fair and just until government is wise enough to ban all tobacco products that emit smoke that can impact nonusers.

A smoker chooses not only to smoke for themselves, but for all others regardless of how sick it makes them including those with lung problems or small children. That law has to change.

Lee Ward:

The percentage of Americans who smoke was 21% in 2004, so I'd guess it's around 20% now - source.

Yeah, I say stick it to the smokers. The link between second-hand smoke and health problems is well-documented, so if smokers want to walk around making children sick with their nasty habit it's fair imho that these same smokers pay extra to support child care for poor children.

Those who can afford the extra 61 cents won't care, and those who can't afford the extra cost will have more incentive to quit.


Oddly, as a smoker I have no problem having the tax raised on cigarettes. In NYC a pack runs about $7.25...whereas in Massachusetts thay are about $3.50.

Many people I know have quit not for the health reasons, but the cost.


Are smokers allowed to smoke indoors where you live? And would you think it ok to sue me for smoking on my fire escape?

Paul Hamilton:

Jeez, when I quit smoking in 1988, I thought that it cost too much and I was paying 32 cents a pack... I'm way too much of a cheapskate to pay anywhere near what you do.


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