Governor introduces plan for a healthier Indiana by raising cigarette tax at least 25 cents

e-HUM Announcement

November 17, 2006

Supported by Bishop and UM-related hospitals

Governor introduces plan for a healthier Indiana by raising cigarette tax at least 25 cents

INDIANAPOLIS (Nov. 17) – Governor Mitch Daniels today proposed a simple yet innovative health plan that would provide health insurance coverage for more than 100,000 Hoosiers, reduce smoking rates – especially among kids – and immunize more Indiana children. The health initiatives would be funded by an increase in the state’s cigarette tax.

Support for the plan already has been expressed by a number of organizations, including the Indiana State Medical Association, the Indiana Minority Health Coalition, Methodist Hospitals (Gary and Merrillville), Clarian Health Partners, the Indiana Tobacco and Cessation Prevention Executive Board and the Hoosier Faith and Health Coalition, where more than 70 United Methodist congregations participate to eliminate tobacco from Indiana. U.S. Secretary of the Health and Human Services Michael Leavitt also applauded the governor’s idea.

The Governor’s Plan for a Healthier Indiana would lead to:

Protection of children from the dangers of smoking and other diseases,
Preventive care for more Hoosiers,
Peace of mind for thousands of Hoosiers who currently have no health insurance and
Personal responsibility to take control of health care decisions

“Indiana can’t be a healthy state with the second highest rate of smoking in the country, and we can’t lower our smoking rate when we sell some of the cheapest cigarettes in America,” said Daniels.

Specifically, the governor has proposed a plan that would:

Initiate an aggressive smoking cessation and reduction campaign, aimed especially at reducing the number of kids who smoke. The plan would provide $24 million more annually to the Indiana Tobacco and Prevention Cessation Trust Fund (IPTC) for local tobacco cessation and reduction programs. This amount, plus the current budget of $11 million, would bring IPTC funding to the level recommended by the Centers for Disease Control.
Assure that children are fully immunized by age 2 with $11 million to expand access to vaccinations.
Establish a program that offers health insurance to 100,000 or more low-income Hoosiers.

Funded by increase in cigarette tax

The plan would be funded by an increase in the state’s cigarette tax – which is currently 55½ cents per pack and the 36th lowest rate in the country – and a variety of federal funds. The governor suggested an increase of at least 25 cents, but will ask the legislature to determine the precise amount. The number of uninsured who could receive coverage would go up dependent upon the size of the cigarette tax increase. With a 25-cent increase, it is estimated up to 120,000 people could receive coverage. With a 50-cent increase, about 200,000 could receive coverage.

“We’ve balanced the budget already through spending reductions and no tax increases. That will continue to be our approach,” said Daniels. “Any new proceeds should go to promote the health of Hoosiers and for no other purpose.”

The governor’s three-part health insurance coverage plan would help Hoosiers who can least afford coverage. It would be available to those who earn less than 200 percent of the federal poverty level and who are without employer-sponsored health insurance.

“Everyday, Hoosiers all across Indiana are worried about how a health event they are not prepared to deal with financially could turn their lives upside down,” said Daniels. “This plan is a start to give many more people protection and peace of mind while fostering more personal responsibility to make good decisions.”

Here’s how the plan would work:

Each eligible Hoosier would receive preventive care of up to $500 annually, including physicals, smoking reduction, diabetes screening and other services.
A $1,100 Personal Wellness Responsibility Account – or POWER account – would be established for each eligible person to use for medical costs, such as physician visits, prescriptions and diagnostic exams. Each account would be built with a combination of personal monetary contributions of up to 5 percent of gross income (the higher one’s income, the higher the contribution) and state contributions. The POWER account would be controlled by the participant. If all recommended preventive services have been completed and more than $500 remains in the account at the end of each year, the individual can withdraw the excess funds or roll them over to the next year.
Each person would be provided with $300,000 of annual insurance coverage with up to $1 million of lifetime coverage.

Because participants will control how they spend their preventive and POWER accounts, they will have more interest in finding services at the best possible price and search for better information about those services.

“I certainly share the values and vision expressed so well by Governor Daniels,” said Michael Leavitt, Secretary of the U.S. Department of Health and Human Services. “I applaud his commitment and creativity to help address the compelling issue of the uninsured. I am enthusiastic about working with him to develop his ideas into action through flexibility now available through Medicaid and exploring the potential of a budget neutral waiver. We intend to move aggressively on the proposal.”

An estimated 14.3 percent of Indiana’s population, more than 550,000 individuals, currently has no health insurance, according to U.S. Census Bureau statistics.

Where the money will come from

To provide coverage to 120,000 Hoosiers, the total cost would be about $480 million, and would be paid with these funds: $95 million of cigarette tax proceeds, $80 million of individual contributions, $50 million from the Disproportionate Share Hospital Program (DSH) and $255 million in expected federal funds.

If the cost of cigarettes was raised by 50 cents per pack, coverage could provided to about 200,000 people using $172 million from cigarette tax revenue; $132 million from individual contributions, $50 million DSH and $446 million in expected federal funds.

If the plan receives approval by the General Assembly, the proposed effective date would be January 1, 2008.

Daniels announced that this plan will be introduced into the Indiana State Senate by Senator Patricia Miller of Indianapolis and a member of Old Bethel United Methodist Church.

Hoosier Faith and Health Coalition

More than 70 United Methodist congregations statewide have already signed a Hoosier Faith and Health Coalition (HF&HF) petition calling for a 50-cent increase in the cigarette tax, full funding of ITPC and support of local ordinances banning smoking from workplaces such as restaurants.

Earlier this year, the North Indiana Conference meeting at Lafayette in June approved the HF&HC resolution but edited out the increase in cigarette taxes.

HF&HC has more than 400 participating congregations across Christian, Jewish and Muslim faith groups and will probably push for a dollar increase in the cigarette tax. The higher the tax, the more lower-income Hoosiers will benefit.

Responses to announcement

In response to Daniels’ announcement, Bishop Mike Coyner, an advisor to HF&HC, said, he “greatly appreciate the leadership Governor Daniels has taken in moving our state’s health a dramatic step forward, particularly related to the devastating effects of tobacco. Our state has been grasping for a breath of fresh air brought by the Governor’s plan to increase Indiana’s cigarette tax and fund tobacco prevention, children’s immunizations and health care for the most needy.”

Also responding to Daniels’ plan, Ed Charbonneau, president and CEO of The Methodist Hospitals of Gary and Merrillville, said, “The nation’s health care delivery system is broken and must be fixed. We applaud Governor Daniels’ initiative aimed at providing insurance coverage for more than 100,000 currently uninsured Hoosiers. Conceptually, we support the program, recognizing that it is one piece of a much needed comprehensive health care overhaul.”

Dan Evans, president and CEO of Clarian Health Partners (which includes United Methodist-related Methodist Hospital of Indianapolis, responded, “Clarian Health shares Governor Daniels’ vision to expand health insurance coverage for thousands of low-income Hoosier families who currently do not have access to employer-sponsored coverage. This plan incorporates innovative elements promoting personal responsibility, enabling preventive care and encouraging greater transparency among health care providers – all of which will contribute to improved health outcomes for Hoosiers.”

A link to the governor’s presentation may be found at this link: www.IN.gov/gov/pdfs/GovernorsPresesentation.pdf

A link to the fact sheets and other supporting documents may be found at this link: www.IN.gov/gov/pdfs/HealthierIndianaSupportingDocuments.pdf

A copy of the Hoosier Faith and Health Coalition Resolution to be signed by your congregation can be found on the Indiana Area UMC Web site at www.inareaumc.org. Click on “Join the Indiana Anti-smoking Campaign.”

DEATH: ALLRED

MARGARET ANN ALLRED, spouse of the Rev. W. Robert Allred, retired Elder (SIC), died Nov. 15, 2006. Calling hours are scheduled for Friday, Nov. 17 from 3:30 to 8 p.m. and Saturday, Nov. 18 from 1 to 2 p.m. in the Wright Memorial Chapel at the Franklin Community, 1070 W. Jefferson St, Franklin, Ind. A memorial service will be held Saturday, Nov. 18, at 2 p.m. in the Wright Memorial Chapel with burial at Mooresville Cemetery in Mooresville, Ind. Survivors include: Husband, the Rev. Robert Allred, 1120 N. Methodist Dr., Franklin, IN 46131; two daughters, Ann Jones and Amy Uhl; two sons, Alan Allred and Aaron Allred.

NEWLY LISTED EVENTS

MERRILLVILLE CHURCH HOSTING CHRISTMAS CONCERNT DEC. 10

The Merrillville United Methodist Church will host two Christmas concerts, “Christmas Guitars on Tour 2006,” at 3 and 7:30 p.m. on Sunday, Dec.10. Proceeds from the concerts will go to support the work of Coats for Kids at Merrillville UMC, 305 East 68th Place. Smooth Jazz guitarist, Bryan Lubeck, and world-renowned guitarist, Johannes Linstead, will be performing traditional Christmas favorites as well as the artists top hits. Bryan is a rising star in the Smooth Jazz scene. He is known for blending his Latin grooves with Jazz and R&B styles. Linstead is a Billboard magazine top-ten guitarist with a worldwide following. He was recently named the Number One World Guitarist. The Dec.10 concerts are at the Merrillville UMC in Merrillville. Tickets can be purchased through StarTickets or by calling 800-585-3737. Advance tickets are $15 and $20 on the day of the concerts.

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