Smoking and commercial tobacco/nicotine use can not only have devastating health effects but also carry significant economic burden as well. In Massachusetts, it is estimated annually:*
- $4.74 billion in health care costs are directly attributable to smoking
- $1.36 billion in Medicaid costs are caused by smoking
- $7.0 billion is lost due to smoking-caused productivity losses
- $1,117 per household is paid in residents’ state & federal taxes to cover smoking-caused government expenditures
*Note that these estimates are for cigarette smoking only and do not include costs resulting from use of other tobacco/nicotine products
You can find more information on the cost of smoking in Massachusetts and nationally at:
- The Toll of Tobacco in Massachusetts - Campaign for Tobacco-Free Kids
- Economic Trends in Tobacco | Smoking and Tobacco Use | CDC
We also offer free resources to help you or someone you know quit smoking or using other tobacco or nicotine products.
Reports on the economic impact of Massachusetts menthol cigarette restriction
These reports were created by John Tauras, Ph.D. and Frank Chaloupka, Ph.D. at The University of Illinois Chicago, in collaboration with the Massachusetts Tobacco Cessation and Prevention Program. They examine the health care cost savings in Massachusetts resulting from the menthol cigarette restriction and the impact of the menthol cigarette restriction on tobacco retailers.
Health care cost savings associated with the Massachusetts flavored tobacco restriction on menthol cigarettes
Read the report titled Health care cost savings associated with the Massachusetts flavored tobacco restriction on menthol cigarettes.
Background
- In June 2020, Massachusetts became the first state in the United States to restrict the sale of all flavored tobacco products, including menthol cigarettes.
- The Massachusetts Tobacco Cessation and Prevention Program (MTCP) conducted a comprehensive evaluation of the impact of the policy on tobacco use, access and cessation.
- As part of this evaluation, MTCP collaborated with economists John Tauras, Ph.D. and Frank Chaloupka, Ph.D. at the University of Illinois Chicago to examine the impact of the policy on the retail environment and health care costs.
Healthcare cost savings
- Simulations conducted by economists show that restricting menthol cigarettes reduced smoking prevalence in Massachusetts by 1.37 percentage points between June 2020 and January 2023.
As a result of reduced smoking prevalence, economists projected reductions in chronic disease and smoking-related birth/pregnancy complications, which would lead to healthcare cost savings.
Table 1. Direct cost savings (inclusive of inpatient and outpatient services and prescription drugs) due to reductions in lung cancer, heart attack and stroke, and smoking-related birth/pregnancy complications and related health care costs for their children in their first year of life. All projected cost savings have been adjusted for inflation. Overall, 10-year costs savings were projected to be close to $200 million.
| Table 1: Conditions | 1 Year Cost Savings | 5 Year Cost Savings | 10 Year Cost Savings |
|---|---|---|---|
| Pregnancy | $775,742 | $3,984,738 | $8,191,116 |
| Heart attack & stroke | $3,298,846 | $45,644,111 | $113,761,026 |
| Lung Cancer | $714,588 | $21,657,348 | $76,015,640 |
| Total | $4,789,176 | $71,286,197 | $197,967,782 |
Economists also project reduced smoking prevalence would lead to Medicaid cost savings.
Table 2. Savings are inclusive of smoking attributable healthcare costs (ex. cancer, emphysema, arteriosclerosis, heart attack, stroke) incurred by Medicaid recipients who smoke in Massachusetts. Medicaid savings may overlap with savings for specific conditions included in Table 1.
| Table 2: Insurance | 1 Year Cost Savings | 5 Year Cost Savings | 10 Year Cost Savings |
|---|---|---|---|
| Medicaid | $1,052,343 | $15,651,763 | $43,244,385 |
Limitations
- These projections are for menthol cigarettes alone and do not include other flavors or tobacco products.
- Projected cost savings are likely underestimates; overall cost savings do not include savings in other conditions that may be impacted by smoking, such as asthma, and the MassHealth cost savings also do not account for all possible smoking-attributable conditions.
The effects of tobacco flavor restrictions on tobacco retail businesses in Massachusetts and states in the northeast region of the United States
Read the report titled The effects of tobacco flavor restrictions on tobacco retail business in Massachusetts and states in the northeast region of the United States.
Background
- In June 2020, Massachusetts became the first state in the United States to restrict the sale of all flavored tobacco products, including menthol cigarettes.
- The Massachusetts Tobacco Cessation and Prevention Program (MTCP) conducted a comprehensive evaluation of the impact of the policy on tobacco use, access and cessation.
- As part of this evaluation MTCP collaborated with economists John Tauras, Ph.D. and Frank Chaloupka, Ph.D. at the University of Illinois at Chicago to examine the impact of the policy on the retail environment and health care costs.
Impact on the retail environment
Using data from 2014 to 2023, economists examined the effects of restrictions on the sales of flavored cigarettes and vape products for all states in the Northeast Region of the United States (Massachusetts, Maine, Connecticut, New Hampshire, Rhode Island, Vermont, New Jersey, New York, Pennsylvania). They examined the effects on:
- The number of tobacco stores, convenience stores, and convenience stores with gas stations,
- The number of employees working in these stores, and
- The inflation-adjusted average weekly wages paid to employees.
After adjusting for per-capita income; geographic region; COVID restrictions; seasonality, and trends in establishments; employees; and wages over time, results from statistical models showed no evidence that flavored tobacco sales restrictions have a negative effect on:
- The number of stores that sell tobacco products,
- The number of employees, and
the wages paid to employees.
This finding is consistent with previous research.1,2 Data was not available to assess the impact of flavored tobacco restrictions on additional business performance indicators such as sales revenue, net income, profit margins, or customer retention rates. Analyses were not inclusive of all types of tobacco retailers, such as vape shops or online retailers
Limitations
- Data was not available to assess the impact of flavored tobacco restrictions on additional business performance indicators such as sales revenue, net income, profit margins, or customer retention rates.
- Analyses were not inclusive of all types of tobacco retailers, such as vape shops or online retailers.