FY 2013 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
The Patrick-Murray Administration is committed to encourage health and wellness for all Massachusetts residents. In keeping with the Governor’s commitment to control rising health care costs, the FY 2013 budget includes two revenue proposals to fund targeted investments in both public health preventative care services through the Commonwealth Health and Prevention Fund and subsidized health insurance coverage and smoking cessation programs through the Commonwealth Care Trust Fund. These investments will help save money in the statewide health system and help all residents attain healthier lifestyles.
Commonwealth Health and Prevention Fund
By eliminating the sales tax exemption for soda and candy, the Commonwealth preserves more than $51 M in funding for public health programs while at the same time discouraging overconsumption of sugary foods and drinks.
More than half of Massachusetts adults and almost one third of high school and middle school students are overweight or obese. In the past 10 years, the percentage of Massachusetts adults with diabetes has almost doubled, and obesity will soon pass smoking as the leading cause of preventable death.
Consumption of candy and soda is on the rise. Per capita candy consumption has increased steadily since the mid-1980s. Candy and soda add significant non-nutritional calories to the diets of Americans and are directly linked to obesity, especially among children. One bottle of soda contains more than double the recommended daily sugar consumption and accelerates associated public health concerns and costs. The daily number of teaspoons of ‘added sugar’ recommended for a healthy diet and weight is between five and nine; a 20 ounce bottle of soda alone contains 17 teaspoons of added sugar. Such added sugar intake increases a child’s propensity towards obesity by 60%.
The $51 M in new revenue will allow the state to make
further progress in innovative wellness programs, and help avoid budget cuts to
programs that support health and prevention activities, including health
promotion and disease prevention, tobacco cessation, school health, family
health and substance abuse services.
|Health and Prevention Fund: Fiscal Year 2013|
||% Funded from Health and Prevention Fund||Total Health and Prevention Fund Spending|
|Health Promotion and Disease Prevention||413-1111||100%||$3,413,076|
|Total Spending – Health and Prevention Fund||$51,250,000|
In addition to implementing school nutrition regulations and providing parents with the Body Mass Index number of their children, Massachusetts will support various other nutrition and wellness programs such as expanding the successful, evidence-based Mass in Motion municipal health initiative to more communities in the Commonwealth. This additional revenue will also allow for the expansion of the Working on Wellness Program, which engages public and private employers to support wellness programs that will improve the overall health and productivity of employees.
Massachusetts joins 33 other states, including Connecticut, New Jersey, Maine, New York, and Rhode Island that apply sales taxes to soda. An additional 17 states apply sales tax to candy, including Connecticut, New Jersey, Maine, New York and Rhode Island. This sales tax will raise revenue, promote healthier lifestyles and mitigate the escalating costs associated with obesity.
The Governor’s FY 2013 budget proposal maintains funding to help serve 15,000 women and 1,500 men through the Department of Public Health’s Care Coordination Program, which screens for breast, cervical and colorectal cancers. An estimated 1,500 men of color receive outreach to increase screenings for chronic diseases as part of the effort to reduce health disparities. The budget also supports the Mass in Motion initiative, through which the Commonwealth is able to reach the approximately one million of residents with health and wellness information and resources in 14 municipalities. Launched in 2009, the Mass in Motion Initiative promotes wellness through obesity prevention. By stressing the importance of creating conditions that encourage, nurture and promote wellness.
The Governor’s FY 2013 budget preserves funding to the MassHealth Wellness Program. This program encourages MassHealth members to take actions to prevent disease and illness in their lives.
Commonwealth Care Trust Fund
Tobacco use is the number one cause of preventable death and disability in the Commonwealth. More than 9,000 Massachusetts residents die every year from the effects of tobacco – one person every hour of every day. Thousands more are disabled by tobacco use, suffering with chronic illness and pain. Health care expenses caused by smoking costs Massachusetts residents $3.9 B each year. The Massachusetts economy loses another $1.5 B in lost productivity. Under the leadership of Governor Patrick, investments in smoking cessation programs have lowered the Massachusetts smoking rate in 2010 to 15%, one of the lowest smoking rates in the country. As state taxes have pushed the price of cigarettes up, the youth cigarette smoking rate in Massachusetts has decreased. But even as the youth cigarette smoking rate has declined, young people’s use of other tobacco products has increased. In 2009, for the first time, high school students used tobacco products other than cigarettes at a higher rate than cigarettes (17.6% as opposed to 16%).
The Governor’s FY 2013 budget proposes to increase the cigarette tax by 50 cents and to tax other tobacco products at the same rate as cigarettes. Both efforts combined would generate roughly $72.9 M, while also lowering the use of these products among youth and adults. Like current cigarette tax revenue, this money will be deposited into Commonwealth Care Trust Fund to support health care coverage and expand MassHealth’s successful smoking cessation program to Commonwealth Care members.
The tobacco industry is selling products in colorful and fun packaging that attracts young people, pricing these products cheaply to encourage impulse buys. Unlike cigarettes, these other tobacco products are priced within reach of adolescents. Increasing tobacco taxes is one of the strongest strategies to prevent youth smoking according to “Ending the Tobacco Problem: A Blueprint for the Nation” by the Institute of Medicine. Massachusetts’ current tax contains a loophole so that tobacco products other than cigarettes, such as cigarillos and cigars, are taxed at lower rates than cigarettes. Closing this loophole will mean that all tobacco products will be taxed at an equivalent rate and eliminate these cheap alternatives that appeal to children and youth.
Because their brains are still developing, adolescents are especially harmed by tobacco. The nicotine in tobacco products can produce structural and chemical changes in the developing brain that make young people vulnerable to future alcohol and other drug addiction and mental illness. Because of the way nicotine changes the adolescent brain, people who start smoking as adolescents smoke more and have a harder time quitting than people who start as adults.
For every dollar Massachusetts spends on tobacco cessation programs for low income residents, it saves $3 in medical costs, largely from avoided heart attacks and other cardiac-related hospitalizations, which translates into $14.7 M in savings every year for MassHealth, according to the research by George Washington University.
Given the strong success of the program, the Governor’s FY 2013 budget preserves funding for MassHealth tobacco cessation services. This program, started in 2006, allows Medicaid patients to receive nicotine patches, gum, lozenges or medications for co-payments ranging from $1 to $3, and also offers free telephone counseling. Almost 38,000 people a year participated. The anti-smoking initiative managed to reach about 40% of the smokers in the Medicaid program, and was successful in driving down the numbers from about 38% to 28%. This program will be replicated in Commonwealth Care with an investment of $2 M to the Massachusetts Health Connector Authority.
The budget proposes to invest an additional $1.7 M in the Department of Public Health’s tobacco cessation and prevention program. Approximately $700 K of this investment will support the Commonwealth’s successful Veterans Quit Smoking Patch Giveaway to provide free nicotine patches to veterans and their families.
Additionally, the Group Insurance Commission (GIC) will leverage federal Early Retiree Reinsurance Program (ERRP) funds to invest $2 M in a wellness initiative for its members (retirees and active employees) and $2 M to develop and implement a smoking cessation educational campaign to replicate the success of the MassHealth program.
 Associated Press. Scientists Target Soda as Main Cause of Obesity. 6 March 2006.
 UCLA Center for Health Policy Research, http://www.vcstar.com/news/2009/sep/17/ucla-study-directly-links-soda-with-obesity/
 Massachusetts Tobacco Control Program, http://www.mass.gov/eohhs/docs/dph/tobacco-control/program-overview.pdf
 Trends in Youth Tobacco Use in Massachusetts, 1993-2009, http://www.mass.gov/eohhs/docs/dph/tobacco-control/adolescent-tobacco-use-youth-trends-1993-2009.pdf
 Many published studies have shown this, including: Abreu-villaca, Y. et al (2003). Short-term adolescent nicotine exposure has immediate and persistent effects on cholinergic systems: Critical periods, patterns of exposure, dose thresholds. Neuropsychopharmocology, 28, pp. 1935-1949.
 Richard P, West K, Ku L (2012) The Return on Investment of a Medicaid Tobacco Cessation Program in Massachusetts. PLoS ONE 7(1): e29665. doi:10.1371/journal.pone.0029665