It’s been reported today that Big Tobacco is pouring another $7.7 million into the campaign to defeat I-185.
Let’s explain what I-185 is exactly, before getting into the money.
What is I-185?
As you probably know, I-185 would increase the cost of a pack of smokes by $2. That money would then be used to keep the Medicaid expansion that went into effect via SB 405 during the 2015 Legislature.
Medicaid expansion has been called “a cornerstone of the ACA,” or what we commonly call Obamacare.
For those that have bought healthcare on the marketplace, you know that Obamacare makes it easier to get healthcare if you’re poor, and damn-near impossible if you’re middle class or upper-middle class.
We know that I-185 is supposed to collect around $74 million a year by 2023…or five years from now.
This money will be used to keep the program going, which pretty much means using taxpayer money to subsidize healthcare for poor people so that healthcare officials and stockowners don’t have to shoulder that cost.
Sadly, state legislators figure that Medicaid expansion will cost Montana $150 million beginning in 2019.
This number is in dispute, with some analysts saying it’ll be closer to $70 million.
The reason for the cost increase is simple: the feds funded nearly all of Obamacare’s costs for the states until 2017. At that point the states began paying 6% of the costs, next year they’ll pay 7% and in 2020 they’ll pay 10%.
That 7% next year could come to $150 million, and I-185 will only bring in around $40 million that year…maybe less.
So that means the state still has to come up with at least another $51 million to keep the expansion going.
Where’s the state going to get that money?
I’m sure the idea of a sales tax will be bandied about by members of both parties, while the idea of legalizing marijuana will be laughed at.
I’m not sure anyone will discuss the upwards of $400 million that Medicaid expansion has added to the Montana economy.
But this can be misleading.
For instance, when Obamacare started in Montana in 2016, the state had to spend $5.3 million to cover what the feds would not.
But we saved $18 million in taxpayer money because of that, or $12.7 million after the costs.
That was a good investment.
Now fast forward to 2020, when economists figure the state will have to spend $70 million to keep the program going, with just $42 million saved.
That’s a bad investment, as the taxpayers have to come up with another $28 million (or $51 million if we go by the legislator estimates).
If we go by the BBER economist numbers, we're in trouble. If we go by state legislator numbers, then we’re in trouble too.
Let’s get back to that $400 million in economic expansion.
Most of this is through job creation. In that regard, maybe those people should pay more taxes…since they’re reaping all the benefits.
But job creation is misleading, as most of those jobs have come about by using federal and state tax dollars to create jobs in the private sector.
So in effect, this economic expansion came out of your pocket.
It’s about to come out of the low-income, smoking population’s pocket as well.
An extra $2 a pack will probably cost most smokers an extra $14 a week, or about $60 a month. That’ll come to $720 a year…or nearly a month’s worth of rent.
The good news for smokers is that they won’t be charged for Medicaid expansion twice: most simply make so little money that they don’t pay income taxes.
We’ve already established that tax money is being used to create the Medicaid expansion ‘economic boost’ here in Montana, which is simply unsustainable.
A big problem with subsidizing industries is that eventually tax money runs out.
What won’t run out is the money that Big Tobacco has, and that gets us back to where we started.
Both the makers of Marlboro cigarettes and Camel cigarettes put another $7.7 million into their efforts to see I-185 fail.
You might remember that back in 2003, Philip Morris changed its name to Altria.
They make Marlboros, and last year they spent more than any other group to lobby the Montana Legislature.
Their spending came to $183,000. The third-highest spender was RAI Services, which is the maker of Camel cigarettes. They spent $113,000 lobbying legislators to keep tobacco taxes low.
And it worked.
Those two companies spent nearly $300,000 to wine and dine legislators, and they got their way.
Now they’ve spent almost $9 million to ensure I-185 fails.
The competition can’t keep up.
Those supporting I-185 have spent just $2 million.
Personally, I think I-185 has a very good chance of passing. I suspect I’ll be paying $2 more for smokes starting in January.
I hope it doesn’t pass, however, and I won’t be voting for it.
Like I said, I smoke. On top of that, my son just got kicked of Healthy Montana Kids.
And to add insult to injury, my Obamacare premium is set to double next year, while my deductible will go from $1,000 to $10,000.
All of these healthcare changes in my life have come about simply because I did the right thing: I went out and got more jobs and made more money.
Poor people either can’t or won’t do that, and now I have to pay for them…both with my smoking and my increased premiums and deductible.
So when it comes to I-185…thanks, but no thanks.
I’d rather have that $2 a day ($720 a year) in my own pocket.
I know the GOP legislature won’t raise taxes on me, and I’m hopeful the voters won’t.
As someone that’s made $15,000 so far this year, I just can’t afford to pay for other people’s healthcare.
We’ll see how other voters feel in two months.
“Ballot Language for Initiative No. 185 (I-185).” Montana Secretary of State. Retrieved 6 September 2018. https://sosmt.gov/Portals/142/Elections/archives/2010s/2018/I-185.pdf
Davis, Elizabeth and Fogoros, Richard N. “What’s the Difference Between Medicaid & Obamacare?” Very Well Health. 10 February 2018. https://www.verywellhealth.com/whats-the-difference-between-medicaid-obamacare-1738843
Dennison, Mike. “Tobacco firms throw additional $7.7M against MT tobacco tax/Medicaid initiative.” KHLH. 6 September 2018. http://www.kxlh.com/story/39038578/tobacco-firms-throw-additional-77m-against-mt-tobacco-taxmedicaid-initiative#.W5E285V6t-0.twitter
Houghton, Katheryn. “Report shows Montana’s Medicaid expansion paying for itself.” Bozeman Daily Chronicle. 11 April 2018. https://www.bozemandailychronicle.com/news/health/report-shows-montana-s-medicaid-expansion-paying-for-itself/article_de75d2c2-8da3-5ed4-835e-dbfaaedc8864.html
Norris, Louise. “Montana and the ACA’s Medicaid expansion.” Health Insurance.org. 5 June 2018. https://www.healthinsurance.org/montana-medicaid/
Strandberg, Greg. “Lobbying Money in the 2017 Montana Legislature.” Big Sky Words. 28 April 2017. http://www.bigskywords.com/montana-blog/lobbying-money-in-the-2017-montana-legislature