Like many states, Arizona’s public finances are in miserable shape. And much of the state’s budget trouble can be attributed to a decade-old decision to finance an expansion of low-income health insurance coverage with revenue dependent on tobacco industry profits.
A little more than a decade ago, the state grew its low-income health insurance rolls, claiming the new enrollees would be paid for by revenue from a deal with tobacco industry. Now, with smoking rates (and tobacco industry revenues) falling, a budget crisis brewing, and a growing number of individuals eligible for Medicaid, the state has chosen to pare back its health coverage for low-income adults.
Starting July 8, the state’s Medicaid program will implement changes expected to reduce the program’s rolls by 117,000 single, childless adults over the next year. After much delay, the Obama administration last week finally granted Arizona permission to go through with the cuts, but only grudgingly. "We regret the action Arizona is taking," a federal Medicaid official told The Arizona Republic.
Read the entire article here:
http://reason.com/archives/2011/07/06/smoked-out
For the report click here:
http://www.arizonatax.org/publications/special_reports/Tobacco_Taxes.pdf
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