issue brief MISSISSIPPI MEDICAID TOBACCO-RELATED COST PUBLISHED DECEMBER 2018 The negative effects of tobacco usage on health have been well studied, and there is a growing body of evidence documenting the increased risk for specific diseases associated with tobacco use. This higher risk calculates into greater health care costs for treating these diseases, much of which is paid by public programs such as Medicare and Medicaid. The Center for Mississippi Health Policy commissioned researchers with The Hilltop Institute at the University of Maryland, Baltimore County to review Mississippi Medicaid claims data and quantify the financial impact of tobacco use on Mississippi’s Medicaid program. This issue brief summarizes Hilltop’s findings and explores associated policy implications. A nationwide survey of adult Medicaid consumers, conducted by the Center for Medicaid and CHIP Services (CMCS) in 2014 and 2015, found a smoking prevalence of approximately 33.8 percent for adult Mississippi Medicaid enrollees. Tobacco use by these enrollees can affect their own health, and secondhand smoke can impact the health of their family members. In order to estimate the cost to Medicaid attributable to tobacco use, researchers with The Hilltop Institute analyzed a limited data set of all Medicaid and Children’s Health Insurance Program (CHIP) enrollees and claims for calendar years 2016 and 2017. To identify the costs that The estimated direct and indirect cost of could be attributable to smoking, Hilltop used a method for tobacco-related illness to Mississippi Medicaid was calculating a smoking attributable fraction that accounts $388 million in 2016 and $396 million in 2017. for the fact that tobacco impacts multiple body systems. Smoking can damage every part of your body Source: Centers for Disease Control and Prevention. Health Effects Infographics. https://www.cdc.gov/tobacco/ infographics/health-effects/index.htm#smoking-risks. The complete Hilltop Report is available at mshealthpolicy.com\hilltop-report.pdf When all categories of expenditures were totaled, the estimated direct and indirect cost of tobacco-related illness to Mississippi Medicaid was $388 million in 2016 and $396 million in 2017. 1 of 4 Center for Mississippi Health Policy � Brief: Mississippi Medicaid Tobacco-Related Cost � DECEMBER 2018 Study Methodology This study used claims and enrollment data from Mississippi Medicaid to develop a more precise estimate of the cost of tobacco-related diseases to the Medicaid program than using national data to extrapolate an estimate. This method takes into account many of the unique features of Mississippi’s population, health care delivery system, and payment policies. The majority of Mississippi Medicaid enrollees are younger women and children, along with a group of predominantly elderly women. Children are more likely to be affected by secondhand smoke in their household, and young adults are not likely This method takes into account many of the to have begun exhibiting negative health effects of unique features of Mississippi’s population, health smoking. While elderly persons may have high rates of care delivery system, and payment policies. smoking-related diseases, most of their acute health care services are covered by Medicare. Hilltop’s estimates of tobacco-related costs in Mississippi were determined by multiplying the sum of claims payments made by Medicaid for each tobacco- related illness times the calculated Smoking Attributable Fraction, which was based on Mississippi’s rate of smoking and research literature estimates of the relative risks for the particular illness. FIGURE 1. TOBACCO-RELATED CONDITIONS INCLUDED IN COST ESTIMATES SMOKING ATTRIBUTABLE FRACTION (SAF) CARDIAC & VASCULAR CANCER RESPIRATORY DISEASES OTHER DISEASES The portion of the cost of a disease that can be DISEASES attributable to smoking, as separated from other Acute Myeloid Leukemia Aortic Aneurysm Asthma Alzheimer’s Disease potential causes. Breast Cancer Atherosclerosis Bronchitis and Emphysema Diabetes Type II Cervical and Uterine Cancer Cerebrovascular Disease Chronic Airways Obstruction Hip Fracture Colorectal Cancer Coronary Heart Disease and Chronic Obstructive Macular Degeneration Esophageal Cancer Other Arterial Disease Pulmonary Diseases Pre or Perinatal Conditions Kidney and Renal Pelvis Other Heart Disease Influenza and Pneumonia Resulting in NICU Services Cancer Tuberculosis Rheumatoid Arthritis Laryngeal Cancer Lip, Oral Cavity, and Pharynx Cancer Liver Cancer Pancreatic Cancer Prostate Cancer Stomach Cancer Tracheal, Lung, and Bronchial Cancer Urinary and Bladder Cancer Source: Hilltop Institute. (2018). Total Expenditures on Tobacco-Related Disease in CY 2016 & CY 2017 Hilltop totaled the individually calculated amounts for each tobacco-related illness, developed estimates for costs associated with secondhand smoke, and assessed TOBACCO-RELATED COSTS AS A PERCENTAGE OF MISSISSIPPI MEDICAID EXPENDITURES expenditures for skilled nursing facilities, chemotherapy, and radiation therapy The estimated Medicaid expenditures attributable attributable to tobacco. The sum of these estimates is presented in Figure 2. to tobacco represent approximately nine percent of total Medicaid expenses in CY 2016 and CY 2017, FIGURE 2. SUMMATION OF ESTIMATES OF DIRECT AND INDIRECT COSTS OF TOBACCO-RELATED ILLNESS TO which is consistent with the results of similar studies, MISSISSIPPI MEDICAID, 2016-2017 particularly given the composition of Mississippi’s 2016 2017 Medicaid population compared to other states. Direct costs of treatment for tobacco-related conditions as primary diagnoses $241,134,957 $246,616,165 Costs of conditions from secondhand smoke $18,612,551 $19,547,028 Nursing facility costs attributed from other claims for tobacco-related conditions $123,535,768 $124,892,593 Chemotherapy and radiation therapy $4,666,951 $4,867,313 TOTAL $387,952,243 $395,925,117 Source: Hilltop Institute. (2018). 2 of 4 Center for Mississippi Health Policy � Brief: Mississippi Medicaid Tobacco-Related Cost � DECEMBER 2018 Policy Implications Many states have sought to reduce both the financial and health impacts of tobacco by implementing programs and policies to prevent smoking or assist smokers to quit, particularly among Medicaid enrollees. The following are some of the most common approaches. Tobacco Cessation Support and Coverage SMOKING CESSATION COVERAGE FOR PREGNANT Mississippi Medicaid covers smoking cessation services for enrollees, including WOMEN All state Medicaid programs are required to cover cessation counseling (pregnant women only), as well as any of seven FDA- cessation treatment and counseling for pregnant approved treatments. Relative to other state Medicaid programs, Mississippi has women at no cost. fewer barriers to access these treatments. Mississippi Medicaid does require stepped-care therapy, copayments for some enrollees, and a limited duration for some treatments. Prior authorization and counseling for medications, however, are not required, and enrollees are not limited on the number of annual or lifetime attempts to quit smoking. Missouri is the only state to have removed all barriers. Smoke-free Ordinances and Laws SMOKE-FREE LAWS Multiple studies have documented the association between the passage of Research documenting the association between strong laws prohibiting smoking in public places and the reduction in hospital smoke-free laws and lower hospital admission rates due to cardiovascular, cerebrovascular, and respiratory admissions for heart attacks, other cardiovascular events, strokes, and respiratory diseases found greater reduction in risk was associated disease, as well as drops in emergency room visits for asthma. Researchers in with more comprehensive laws. Mississippi found reductions in hospital admissions for heart attacks following enactment of local comprehensive smoke-free ordinances. As of June 2018, 34 states ban smoking in restaurants, 34 states ban smoking at both government and private worksites, and 27 states have 100 percent smoke-free indoor air laws for restaurants, bars, and both private and government worksites. Mississippi bans smoking statewide only at government worksites. Tobacco Tax Increase TOBACCO TAXES AND SMOKING RATES CDC found that an increase in excise taxes in Research shows that increasing the cost of tobacco products by raising taxes on Massachusetts, combined with smoking prevention and them will reduce consumption, particularly among youth. Evidence indicates that cessation programs, produced a 19.7 percent decline in cigarette consumption. the most effective taxes are implemented in sizable increments (e.g. $1.00 - $2.00 per pack) and combined with state-supported smoking prevention and cessation AGE OF INITIATION programs (see sidebar). Mississippi’s current tobacco tax is $0.68 per pack, and Research shows that approximately 90% of adult has not changed since 2009. Mississippi’s tobacco tax is well below the national cigarette smokers reported first trying cigarettes before average of approximately $1.78 per pack. the age of 19, and almost 100% reporting first use before age 26. Raising the Minimum Legal Age to Purchase Tobacco to 21 The National Academy of Medicine (NAM—formerly called the Institute of MINIMUM LEGAL AGE (MLA) LAWS Medicine) examined the public health impacts of raising the Minimum Legal Age Currently, five states require an MLA of 21, three states (MLA) to purchase tobacco and found that the optimal benefit would accrue with set their MLA at 19, and 47 states include e-cigarettes in their MLA requirements. Over 300 local governments in setting the MLA at 21 years because the parts of the brain most responsible for 21 states have raised the tobacco purchase age to 21. decision-making, impulse control, and susceptibility to peer pressure continue to develop substantially between 18 and 21. The NAM projected that changing IMPACT OF RAISING MLA the MLA to 21 would likely produce a 12 percent decrease in the prevalence of Research conducted by the National Academy of tobacco use (see sidebar). Changes in MLA requirements have been enacted Medicine found that if the MLA were raised to 21 nationwide, there would be approximately 223,000 at both state and local levels (see sidebar). A study evaluating the impact of the fewer premature deaths, 50,000 fewer deaths from lung MLA change in Needham, Massachusetts from 18 to 21 found the rate of smoking cancer, and 4.2 million fewer years of life lost for those among high school students decreased by nearly 50 percent from 2006 to 2010. born between 2000 and 2019. 3 of 4 Center for Mississippi Health Policy � Brief: Mississippi Medicaid Tobacco-Related Cost � DECEMBER 2018 Summary The negative impacts of tobacco use on multiple body systems have been well documented in the research literature. Researchers with The Hilltop Institute applied this evidence in analyzing Mississippi Medicaid claims to develop a Mississippi-specific estimate of the cost to Medicaid attributable to tobacco. The result of this analysis was an estimated cost of tobacco-related illness to Mississippi Medicaid of $388 million in 2016 and $396 million in 2017. Policy actions taken by states in an attempt to reduce the prevalence of smoking and associated cost to public health care programs include paying for smoking cessation services, enacting laws to prohibit smoking in public places, increasing taxes on tobacco products, and raising the minimum age to purchase tobacco to 21. Sources Berman ML. (2016). Law and the Public’s Health: Raising the Tobacco Sales Age to 21: Surveying the Legal Landscape. Public Health Reports 131(2):378-381. doi.org/10.1177/003335491613100223 Campaign for Tobacco Free Kids. (2018). Cigarette Tax Increases by State Per Year 2000-2018. https://www.tobaccofreekids.org/ assets/factsheets/0275.pdf Campaign for Tobacco Free Kids. (2018). State Cigarette Excise Tax Rates & Rankings. https://www.tobaccofreekids.org/assets/ factsheets/0097.pdf. Campaign for Tobacco Free Kids. (2018). Increasing the Minimum Legal Sale Age for Tobacco Products to 21. https://www.tobac- cofreekids.org/assets/factsheets/0376.pdf. Centers for Disease Control and Prevention. (2018). STATE System Smokefree Indoor Air Fact Sheet. https://chronicdata.cdc.gov/ Legislation/STATE-System-Smokefree-Indoor-Air-Fact-Sheet/vgq2-kkcg. Centers for Disease Control and Prevention. (2018). STATE System Excise Tax Fact Sheet. file:///C:/Users/thanna/Downloads/STATE _20System_20Excise_20Tax_20Fact_20Sheet.pdf Centers for Disease Control and Prevention. (2018). STATE System Tobacco 21 Fact Sheet. file:///C:/Users/thanna/Downloads/STATE_ 20System_20Tobacco_2021_20Fact_20Sheet.pdf Centers for Medicare and Medicaid Services. (2017). Medical Assistance with Smoking and Tobacco Cessation: Findings from a 2014- 2015 Nationwide Survey of Adult Medicaid Beneficiaries. https://www.medicaid.gov/medicaid/quality-of-care/downloads/performance-measurement/brief-tobacco-cessation.pdf. Chaloupka F, Sweanor D, & Warner K. (2015). Differential taxes for differential risks – toward reduced harm from nicotine-yielding prod- ucts. NEJM 373(7):594-597. doi:10.1056/NEJMp1505710. DiGiulio A, Jump Z, Yu A, et al. State Medicaid Coverage for Tobacco Cessation Treatments and Barriers to Accessing Treatments — United States, 2015–2017. MMWR Morb Mortal Wkly Rep 2018;67:390–395. doi:10.15585/mmwr.mm6713a3 Goldman TR. (2016). Health Policy Brief: Tobacco Taxes. Health Affairs. September 19, 2016. https://www.healthaffairs.org/do/10.1377/ hpb20160919.471471/listitem/healthpolicybrief_163.pdf. Hanson K. (2018). State actions on tobacco prevention and cessation. Legisbrief. 2014:22(24). National Conference of State Legisla- tures. November 2018. http://www.ncsl.org/Portals/1/Documents/legisbriefs/2018/November/TobaccoPrevention_Nov2018_41_04%20FINAL.pdf. Hilltop Institute. (2018). Estimating the Costs to Mississippi Medicaid Attributable to Tobacco. The Hilltop Institute, University of Mary- land, Baltimore County. November 2018. Prepared for the Center for Mississippi Health Policy. Kelly B. (2014). Helping smokers quit improves health and budgets. Legisbrief. 2018:26(41). National Conference of State Legisla- tures. June 2014. http://www.ncsl.org/research/health/helping-smokers-quit-improves-health-and-budgets.aspx. McMillen R, Hill A, Valentine N, Collins R. (2010). The Starkville and Hattiesburg Heart Attack Studies: Reductions in Heart Attack Admissions Following the Implementation of Local Smoke-Free Ordinances. Starkville, MS: Mississippi State University. https://mstobaccodata.org/wp-content/uploads/2015/08/HeartAttackReport_Oct10.pdf. October 2010. McMillen R, McClelland E, Winter A. (2018). Smoke-free ordinances in Mississippi predict lower hospital admission rates for acute cardiovascular, stroke, and pulmonary events. J Miss State Med Ass. 2018; 59(6/7):285-288. National Academy of Medicine (formerly Institute of Medicine). (2015). Public Health Implications of Raising the Minimum Age of Legal Access to Tobacco Products. http://www.nationalacademies.org/hmd/~/media/Files/Report%20Files/2015/TobaccoMinAge/tobacco_mini- mum_age_report_brief.pdf. Plaza Building, Suite 700 Rayens M, et al. (2008). Reduction in asthma-related emergency department visits after implementation of a smoke-free law. J Allergy Clin Immun. 2008; 122(3):537-541. doi:10.1016/j.jaci.2008.06.029. 120 N. Congress Street Sharbaugh M et al. (2018). Impact of cigarette taxes on smoking prevalence from 2001-2015: A report using the Behavioral and Risk Jackson, MS 39201 Factor Surveillance Survey (BRFSS). PLoS ONE. 13(9):e0204416. doi:10.1371/journal.pone.0204416. Tan CE, Glantz SA. (2012). Association Between Smoke-Free Legislation and Hospitalizations for Cardiac, Cerebrovascular, and Respiratory Diseases: A Meta-Analysis. Circulation. 2012(126):2177-2183. doi:10.1161/CIRCULATIONAHA.112.121301. Phone 601.709.2133 Fax 601.709.2134 www.mshealthpolicy.com @mshealthpolicy 4 of 4 Center for Mississippi Health Policy � Brief: Mississippi Medicaid Tobacco-Related Cost � DECEMBER 2018