Massachusetts Lawmakers Look to Cigarette Tax Hike to Avoid Medicaid Cuts

Massachusetts lawmakers are considering raising the state's cigarette tax by as much as $1 per pack in order to avoid making cuts to Mass Health, the state's Medicaid program, the Boston Globe reports. While lawmakers are looking for ways to control Medicaid spending, which has been growing by 10% a year and now accounts for 25% of state spending, they appear "unlikely" to make program cuts. In addition, a House committee tasked with reforming Mass Health is expected next week to recommend "no major cuts" to its budget. Instead, a cigarette tax hike of 50 cents to $1 "represents an increasingly popular revenue stream" to fund Medicaid; the idea is supported by the chairs of the state House and Senate Ways and Means committees, and polls show that "most voters" also support a tax increase to pay for health care programs, the Globe reports (Klein, Boston Globe, 3/28). Hoping to broaden this support, the advocacy group Health Care For All held a rally on March 28 to support a tax increase to protect Medicaid (Lasalandra, Boston Herald, 3/28). A $1 per pack increase would generate almost $300 million a year, according to advocates. It would also would raise the state's cigarette tax to $1.76, making it the highest in nation. In addition to the increased revenue, the tax hike would save the state "hundreds of millions of dollars in health care costs" because it would discourage smoking, according to a recent study by the American Cancer Society. But opponents of the increase say it could lead smokers to buy cigarettes in neighboring states, thereby driving down revenue gains. And despite the measure's growing popularity among legislators, its political future remains uncertain. Acting Gov. Jane Swift (R) has said she will veto a tax increase, and it is not clear if supporters could override a veto (Boston Globe, 3/28).