Healthy Wisconsin Council Blesses $1/Pack Cigarette Increase, Could Be Budget Tool
Gov. Jim Doyle's Healthy Wisconsin Council approved a report today recommending a $1 per pack increase in tobacco taxes in part to help pay for other recommendations designed to cut health insurance costs.
The council approved its draft report with some tweaks before sending it to the governor as he builds the next budget. That includes recommending the extra $227.5 million the increased tobacco taxes would bring in go to a health care trust fund that would cover increased reimbursement rates for Medicaid providers, the council's recommendations and other health care reforms.
Doyle created the council in July to recommend ways to reduce the uninsured rate in Wisconsin by 50 percent, cut the health insurance premiums for individuals and businesses by 30 percent, and strengthen the private insurance market in the state, among other things.
One recommendation is the creation is an authority to issue reinsurance for small businesses and co-ops. It would essentially be an insurance program for insurance companies that would kick in for catastrophic claims. The proposed authority would be allowed to finalize details on how it would work.
The other is an expansion of the Medicaid program to cover childless, uninsured adults making up to $19,600 a year.
Sen. Carol Roessler, one of the council members, said she has long supported an increase in the cigarette tax because of the health care costs associated with tobacco products.
She said she has been encouraged by remarks Doyle has made lately that he is open to such a hike, and she said the reinsurance program was an important experiment to cut health care costs for small businesses and co-ops.
"Standing still isn't sufficient," she said.
Wayne Corey, executive director of the Wisconsin Independent Businesses Inc., said the committee recommended restricting the additional tobacco tax revenue to health care to send the message it shouldn't be used to fill existing holes in the budget. He said he expects Doyle to use it in his budget proposal somehow. But he said it will likely be tweaked by Doyle and then again by lawmakers once they get the budget.
Doyle spokesman Matt Canter called the plan a "blueprint for meaningful health care reform" but couldn't say for sure whether the governor will incorporate it into the budget. He also would not commit the governor to the council's recommendation for an increase in tobacco taxes to $1.77 a pack.
"He's always said he's open to a cigarette tax increase if and only if the money goes toward reducing tobacco use and reducing health care costs," Canter said. "He'll have to look at it."
Sen. Mike Ellis, R-Neenah, today called proposals to increase the cigarette tax increase a "money grab" and said the state should not be considering new programs at a time when it has a $1.6 billion shortfall.
*See the council's draft report:http://www.wispolitics.com/1006/061211HealthyWis.pdf
*See the Ellis release:http://www.wispolitics.com/index.iml?Article=80773
