Democrat proposes cigarette tax increase to cover state cost of Medicaid expansion

State Rep. Gary Odom, D-Nashville, today filed a bill that would increase Tennessee’s cigarette tax by 44 cents per pack (or 2.2 cents per cigarette, as the bill states), which he figures would be enough to cover the cost of Medicaid Expansion.

He had outlined the premise of the measure (HB2096) earlier, acknowledging prospect for passage by the anti-tax Republican supermajority are not good. (There’s not yet a Senate sponsor.) Excerpt from the Tennessean story:

Odom says the tax increase would raise about $175 million a year, more than enough to offset the state’s eventual share of TennCare expansion, while also taking aim at the harmful effects of smoking.

Tennessee now collects 62 cents a pack on cigarettes, the 13th-lowest rate in the nation.
For nearly two years, Democrats have called for offering TennCare, the state’s Medicaid program, to 175,000 more poor Tennesseans under the Affordable Care Act. They argue Tennessee should not turn away pledges from the federal government to pick up the full tab for expansion until 2017 and 90 percent or more through 2020, a promise that would bring about $1 billion a year into the state.

But Republicans in the state legislature have focused on the approximately $170 million that Tennessee would have to pick up eventually. They say that money could come only from spending cuts or higher taxes, and they question whether the federal government will live up to its promises.

“I think there are so many unanswered questions about ‘Obamacare’ that you would be nuts to say here we go, not knowing what five years or three years or two years is going to look like,” said Lt. Gov. Ron Ramsey, R-Blountville.

Note: Odom appears to be responding as well to recent comments by House Speaker Beth Harwell, who said Democrats favoring Medicaid expansion should be “intellectually honest” and explain either what taxes they would raise or what programs they would cut to cover the projected cost to the state after 100 percent federal financing ends.

There’s a line in the bill that, one suspects, invites GOP outrage, declaring state government will “cooperate with the appropriate federal department in any reasonable manner as may be necessary to qualify for federal aid in connection with the medical assistance program and to implement the Patient Protection and Affordable Care Act.”