Most people know that smokers rack up higher health care costs than nonsmokers do. But the Richard M. Fairbanks Foundation wanted to know just how much more smokers on Medicaid cost the state of Indiana.
The answer? More than half a billion dollars.
On average, Indiana Medicaid members who smoke have monthly health care expenditures that are 51 percent higher than those who do not smoke, spending $904.61 compared to $597.58.
In March, the Fairbanks Foundation published a report that found Indiana spends $350 million more on smokers ages 35 to 64 who are on Medicaid. That was bad enough, but if you factor in the next generation of smokers between ages 18 to 64, that amount soars to $540 million.
“This particular study is just focused on the economic impact on our state. All taxpayers, regardless of whether they smoke, are bearing this cost,” said Claire Fiddian-Green, president and chief executive officer of the Fairbanks Foundation, which is on a mission to combat tobacco and opioid addiction. “That figure is definitely an eye-opener for us.”
About 20 percent of adults in Indiana smoke, making the state’s smoking rate significantly higher than the national average of 15 percent.
This past week, the Indiana Senate removed the additional tax from its proposed budget and attempts to revive it have failed.
The Fairbanks Foundation is exploring other ways to curb smoking in the state. Last fall, the foundation released a report that found smoking kills more than 11,000 people in Indiana prematurely each year and costs local employers $2.6 billion each year in of absenteeism, lost productivity and disability.
This most recent report found at least 23 percent of people on Medicaid in Indiana smoke; the report speculates that others may smoke but do not confess their habit to their health care provider.
The report was prepared by SVC, Inc., a health care consulting company founded and headed by Seema Verma, new administrator of the Centers for Medicare and Medicaid Services. Earlier this week, Health Management Associates, a Lansing, Mich.-based company, announced it had acquired SVC Inc.
Armed with the information from the newest report, the Fairbanks Foundation will focus on finding ways to connect smokers with cessation service. The earlier report found Indiana has maintained its high smoking rate despite having comprehensive cessation programs.
In its most recent application for a waiver from the federal government to continue the Healthy Indiana Plan, Indiana’s Medicaid expansion program, the state included a number of initiatives aimed to encourage members to stop smoking, including a fee for those on HIP Plus who continue to smoke. The waiver application also proposed offering incentives to those who engage in cessation efforts.
However, there still could be room for additional efforts, Fiddian-Green said.
“We feel like for our grant-making, we need to better understand what are the barriers for patients and is there a role for our foundation to play,” she said.