1. This bill will reduce smoking among workers, because the single most effective way to reduce smoking is through increasing the price of tobacco products. Researchers (Weiss, Kristein and others) have found that employees who smoke increase costs to their employers through:

a. Increased absenteeism. On average, smokers are absent 50% more often than non-smokers. A study by Dow Chemical found that smoking employees were missing 5.5 more work days per year than their nonsmoking peers. Costs for these absences include temporary replacements and lowered productivity and morale among employees who are on the job and must cope with absenteeism.

b. Lower productivity. Research documents lower productivity in smoking employees and increases in productivity when smoking is eliminated or banned.

c. Health insurance costs. Additional health care costs per smoker in the USA are slightly over $300 per year in 1983 dollars and this estimate is conservative. Incremental health insurance costs are also incurred by nonsmokers who must breathe secondary smoke. Employers would benefit from reduced costs by the bill’s impact on lowering second hand smoke exposure from co-workers and from members of the community at large.

d. Increased costs for accidental injury and related workers compensation costs, estimated by economist Marvin M. Kristein, Ph.D. of the American Health Foundation at $45 per year. Smokers have twice the accident rate of nonsmokers due in part to loss of attention, smoking hand occupied, eye irritation and cough.


e. Increased costs of other insurance. Other costs which can be cut with a reduction
in smoking are fire insurance (25-35% lower in smoke free businesses) and disability and early retirement costs. (Smokers are 6X more likely to become disabled and retire early).


2. With the downturn in state money available for expanding health care, this bill provides a new, dedicated revenue source to continue making progress in covering the uninsured. It will provide coverage for 85,000 low and moderate-income adults. The new $147M/year in revenue from the tobacco tax will primarily be used for expanding MassHealth, which then generates approximately $115M in additional matching funds from the federal government.

3. Businesses that currently provide insurance are already helping to subsidize the care of the uninsured indirectly through the Free Care Pool. The bill will reduce demand on the Pool and directly increase funding for the Pool.

a. Reduced demand. The bill provides MassHealth for approximately 60,000 uninsured parents, adults without dependents and young adults age 19 and 20 who now rely on the Pool. In addition, another 15,000 adults will be eligible for the Adult Medical Security Program, which provides primary care and prevention services to adults who are not eligible for MassHealth because of citizenship status or income level. These adults will still use the Pool for hospitalization, but hospital and emergency room costs for this group will be reduced by providing regular primary care.

b. The bill provides $50M from general funds for the Pool (which are likely to be
replaced by new federal matching funds through a recent change in DSH payment rules), thereby ensuring that it can meet its obligations.

4. Low and moderate income workers under 200% of poverty ($34,000 for a family of four) whose employers do not offer insurance or who cannot afford to purchase it if offered, will be eligible for either MassHealth or the AMSP. Those between 200% and 300% of poverty ($51,000) will be eligible for the AMSP at a cost of $50/month. These new programs will be of particular benefit to Latino and African-American workers because the rate of uninsurance among Latinos is 3 times that of whites and among African-Americans, two times.

5. Workers without insurance are more likely to suffer from poor health and to become seriously ill from problems that could have been addressed earlier if they had access to regular health care. Uninsured workers are therefore more prone to absenteeism or reduced productivity due to illness.

6. The bill supports expansion of proven and effective health education and outreach to make sure that low income people and people in communities of color who are eligible for the programs actually get enrolled, find regular primary care, and embrace preventive health through health education and outreach provided by trusted members of their community (Community Health Workers).

7. Small, community based business owners and their employees in low income neighborhoods and communities of color, who may not be able to afford providing health insurance, will benefit by having MassHealth and the AMSP available to employees.