Niko Karvounis at the Health Beat Blog has a full article on Big Tobacco being the leading cause of death for… state health reform.
The excellent piece appropriately spotlights Big Tobacco’s $65 million opposition to Proposition 86–which would have funded emergency rooms and children’s coveage, and their instrumental role in opposing health reform in 2007-8. It’s worth quoting the California section:
Consider California. The Times notes that the state’s recent bipartisan plan for instituting universal health care, endorsed by Republican Gov. Arnold Schwarzenegger and Democratic Assembly Speaker Fabian Núñez, “died in the State Senate in January partly because of opposition to the $1.50-a-pack increase it included.”
This wasn’t the first time cigarette taxes have been an issue in California. In 2006, California voters turned back a ballot initiative, Proposition 86, that proposed to increase the cost of a cigarette pack by $2.60. Supporters of the proposition estimated proceeds from the tax at $2 billion—which would have been used to help fund health care reforms—and forecasted a $16.5 billion long-term decline in health care costs thanks to reductions in smoking. Good stuff.
But the proposition failed by a narrow margin: 48 percent of voters approved the measure while 52 percent said no. Observers are quick to note that this close call came about despite the fact that Big Tobacco spent a whopping $65 million to fight Proposition 86, pouring that money into lobbying and advertising.
These efforts often get ugly. The industry’s anti-tax campaign listed non-existent groups like the “Chamber of Commerce of Los Angeles County” as being opposed to the proposition. It also sent out mailers that attributed anti-86 stances to politicians—wrongly—without their approval, and issued statements suggesting that terrorists would somehow benefit from a higher tobacco tax.
In retrospect, it’s unsurprising that tobacco companies got down and dirty—after all, the tobacco industry has a lot invested in California. A 2006 Business Week article breaks down the numbers: “California is home to 9 percent of all U.S. smokers, and a successful Prop 86 would certainly dent tobacco companies’ bottom lines. An analysis by the Tobacco Control Section of the California Health Services Dept. expects that it could cut cigarette sales by 312 million packs a year. Let’s estimate, conservatively, that Philip Morris makes a profit of 20 cents per pack. Given its 51 percent market share, that’s a $32 million hit. Plus, the Tobacco Control Section predicts the smoking rate among high school students will drop from 13.2 percent in 2004 to 7.6 percent [after the passage of Proposition 86].”
Clearly, tobacco companies had a lot to lose. $65 million and lots of lies later, however, it seemed they were safe. That is, until Governor Schwarzenegger’s 2007-2008 health care plan began to garner public support. In a February analysis, Daniel Weintraub of The Sacramento Bee noted that “the basic outline of the governor’s plan – a requirement that every Californian have insurance, with the costs shared by employers, health care providers and individuals themselves – attracted the support of 60 percent to 70 percent of those surveyed by the Public Policy Institute of California in several polls taken during 2007.” Here, it seemed, was a plan that could pass.
Of course, health care reform is never cheap because if you are going to mandate that everyone have insurance, you must provide subsidies for the many families who cannot afford to pay for it on their own. California’s plan was estimated to cost $14 billion, to be funded partly by an increase in cigarette taxes.
Enter Big Tobacco. The industry had been digging its heels into the Golden State’s political scene for years. According to an October report from the Center for Tobacco Control Research and Education at the University of California San Francisco School of Medicine, the tobacco industry had already made major inroads into the CA State legislature by the time Schwarzenegger’s proposal surfaced.
The report notes that “the [tobacco] industry steadily increased monies spent on state level political activities in the period 2003-2007, from $4,086,553 in 2003-2004 ($1,083,448 to candidates) to $4,359,205 in 2005-2006 ($1,895,584 to candidates).” In the 2005-2006 election cycle, almost one quarter of the state legislators on committees relevant to health care—the Health, Budget, and Appropriation committees in the State Assembly and the Health, Human Services and Budget and Fiscal committees in the State Senate—received contributions from the tobacco industry.
It’s thus unsurprising that the tobacco tax became a sticking point for California’s health care plan, and that the proposal sunk. But it’s not just California that’s in Big Tobacco’s crosshairs—the shoot-out between health care reformers and Big Tobacco extends across the nation.
Tobacco has a major negative impact, and not just on the health of our youth…