Tobacco tax hike would fund Medicaid

Local News

February 19, 2008

Anonymous Picayune Item Tue Feb 19, 2008, 03:42 PM CST

Jackson — The House Ways and Means Committee approved two pieces of legislation on Monday aimed at creating revenue sources for the Division of Medicaid and the state’s struggling trauma care system.

Committee members heard from House Medicaid Chairman Dirk Dedeaux, D-Gulfport, who explained that one bill would increase the excise tax on cigarettes by $1.

Currently, Mississippi’s cigarette excise tax is 18 cents — among the lowest in the nation. Gov. Haley Barbour has vetoed past cigarette tax legislation and Senate Finance Committee Chairman Dean Kirby, R-Pearl, has said he won’t consider any tax bills this year.

Dedeaux said the tax would generate about $174 million annually, based on figures from the Stennis Institute of Government at Mississippi State University. He said 90 percent of the revenue would be earmarked for Medicaid. The other 10 percent would go to the trauma system.

Lawmakers are searching for a revenue source for Medicaid because the health care program for the underprivileged is facing a $92 million deficit in the current fiscal year. And, Medicaid Executive Director Robert L. Robinson has told lawmakers the program will need an extra $168 million in funding for the fiscal year that begins July 1.

The bill also has provisions for technical changes to the program, including how patients can select prescription drugs. Dedeaux said going to a preferred and non-preferred prescription list rather than brand name and generic would allow the program to save more money through rebates and supplements.

The cigarette tax bill was amended by the Ways and Means Committee to change its effective date from July 1 to June 1. The bill must now go back to the Medicaid Committee for approval before it progresses in the House.

Lawmakers were taking up numerous pieces of legislation on Monday to meet a Tuesday deadline to pass general bills out of committee.

The other bill approved by Ways and Means would increase a wide range of fees Mississippians pay for services to generate more money for the trauma system. The bill also would penalize hospitals that choose not to participate in the system by making them pay a fee, which is yet to be determined.

The state currently spends $8 million a year to reimburse hospitals for treating uninsured patients who suffer trauma such as gunshot wounds or injuries from car accidents. At least $40 million a year is needed to maintain the trauma system, the report said.

Many hospitals have opted not to participate in the system because of the uncompensated care costs and the difficulty recruiting and retaining specialized physicians.

The University of Mississippi Medical Center is the state’s only Level 1 trauma center, meaning it’s the top tier of care. Forrest General Hospital in Hattiesburg and North Mississippi Medical Center in Tupelo are the only Level 2 facilities in the state.

House Public Health Committee Chairman Steve Holland, D-Plantersville, said because so many hospitals refuse to participate it puts a burden on those that are part of the system.

“If you’re driving through the Mississippi Delta and get shot, have your heart right with the Lord,” Holland said, referring to the lack of trauma facilities in the area.

The legislation would increase the cost of driver’s licenses, gun permits, vehicle inspection stickers, boat inspections, license plates, traffic fines, and other fees. Holland said the fee increases correspond with the number of trauma injuries caused by guns and vehicle crashes.

“If you don’t like it, I would suggest we just forget about the trauma system,” Holland said.

The bills are House Bills 1013 and 1405.

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