Healthcare Providers Propose Tobacco Tax To Prevent Medicaid Cuts

Friday, April 8th 2016, 5:33 pm
By: Grant Hermes

After the Oklahoma Healthcare Authority announced it would be cutting 25-percent from the state Medicaid fund on Mar. 29, hospitals have been scrambling to figure out a way to cut costs without cutting care.

The announced cuts from OHCA triggered and announcement from Integris Baptist Hospitals two days later announcing staff cuts by June 30 should the 25-percent cut actually happen. At other hospitals would see massive budget cuts that could lead to similar reductions, like St. Anthony hospital in Oklahoma City, where the CEO Tammy Powell estimates a $12 million loss,

“I think the patients are going to end up having challenges to get access to care. Our physicians are already having the challenge in providing enough care for Medicaid patients and if we see cuts,” Powell said Friday afternoon.

Many hospital CEOs and healthcare provider associations are looking to a $1.50 sales tax on cigarettes to offset or even avoid the Medicaid cuts. The tax was a big part of the Governor's 2016 budget raising the tax from $1.03 on every pack to $2.53 cents.

But not everyone is on board. Some want the state to fix the budget before adding new taxes.

3/31/2016 Related Story: Integris Medical Network Announces Company-Wide Job Cuts

“Raising taxes is not the answer,” Dave Bond from the Oklahoma Council of Public Affairs-Impact said.

OCPA Impact is the lobbying arm for OCPA, an anti-tax association.

“Increasing the burden of government on Oklahoma families is not the way to climb out of an economic situation like this.”

The tax proposal was taken to the legislature but efforts have stalled. The measure would have to pass the House and Senate before being placed on the ballot in November. All added taxes have to be voted on by the public in Oklahoma.

Supporters of the tax said it could also mean health benefits to Oklahomans not on Medicaid. They said a higher cost on cigarettes could reduce the number of smokers in the state.

According to the United Health Foundation, 21 percent of Oklahomans are smokers. The state health department’s website showed Oklahoma ranking 40th in the country for the number of smokers. But, in the meantime hospitals are hoping for a cure from the capitol before cuts go into effect in June.

 “Knowing that a 25-percent cut is looming in two months, we as hospitals are looking today what are we going to do in six weeks and so the time frame is very small for us to make those decisions.”