Increased Tax On Cigarettes Could Help OK Hospitals, Supporters Say

Thursday, April 7th 2016, 11:03 pm
By: News On 6

The Oklahoma budget crisis is affecting more than our education system; it's hurting hospitals.

Seven in the state have already filed for bankruptcy, and two have closed so far this year.

But, people in the healthcare industry think a proposed cigarette tax could help.

The state has cut 14 percent of Medicaid funding in the past two years. Coming July 1st, the state could cut another 25 percent.

Kevin Gross, president and CEO of Hillcrest Healthcare System, said adding a $1.50 to the cigarette tax, which could be on the November ballot, would help hospitals.

"Which would raise the necessary dollars from the state side, and then they would be matched with federal dollars in order to allow us to expand Insure Oklahoma," Gross said.

Hillcrest stands to lose $18 million come July, which would mean layoffs. It'll be worse for smaller hospital systems.

Gross said, "We're not going to be able to balance the state budget by continuing to reduce reimbursement to hospitals."

So, who might be opposed to the cigarette tax other than smokers? Convenience stores, like QuikTrip.

QuikTrip said the money from the increased cigarette tax wouldn't all go to hospitals because about 70 percent of all taxes on tribe tobacco products go back to the tribes.

But, the Oklahoma Hospital Association said the increased cigarette tax would add $182 million each year to the state budget.

"The goal would be to keep reimbursement where it is right now and not reduce the 25 percent. We think we can do it with the health authority's plan," said Gross.

The cigarette tax would have to pass the legislature before being on the November ballot.