Tobacco Settlement: It Is Not What
the Tobacco Industry Says It Is (continued page 8)
Compared to previous settlements
(Minnesota, Mississippi, Texas, and Florida), this Settlement's payments
are much smaller.
For example, the tobacco-incurred Medicaid costs ratio between Minnesota
to Maine is about 2:1, indicating that Maine should receive about half of
Minnesota's settlement money. Since the Minnesota settlement resulted in
payments of $6.2 billion, a comparable amount for Maine would be $3.1 billion.
Instead, Maine is to receive about $1.4 billion over 25 years. Note: The
tobacco-incurred Medicaid costs are obtained from the Department of Health
and Human Services September, 1998 Public Health Reports article with state
by state analysis of tobacco-incurred Medicaid costs.
Payments Do Not Reflect the Health Care Costs they are Intended to:
The amount of the Settlement's payments only reflect a fraction of the
current tobacco-incurred Medicaid costs. Since health care costs due to
tobacco are expected to rise substantially over the years and since Settlement
payments are not tied to this health care inflation, but to the more conservative
Consumer Price Index, over the years, the Settlement's payments will increasingly
reflect a diminishing share of tobacco's incurred costs to the State.
Most of Maine's Medicaid money is spent on nursing home patients, who
are generally older adults. Maine now has one of the lowest smoking rates
among our population >55 years old, but the highest in the country rates
among our youth and young adults. So, as these young adults age, they should
impact the Medicaid system with sky-rocketing tobacco-related costs.
These settlement payments are not tied to health care inflation or to
tobacco-related costs. So, the taxpayers will still pay the overwhelming
majority of future state and local government costs imposed by tobacco products.
States are barred from filing new health-related monetary claims, even
for populations (state employees, local governments) and health problems
(secondhand smoke) which States will not be compensated for under this Settlement.
Shielded Tobacco Concerns:
Payments obligations do not extend to manufacturers' affiliates - either
their food and beverage affiliates or their international tobacco affiliates.
Tobacco companies have invested domestic tobacco earnings into their affiliates,
yet this money is shielded from payment obligations.
D. OTHER ISSUES:
There has been no public input, including legislative input in this settlement
process, yet this settlement has implications for the public for generations
to come. This is no ordinary lawsuit!
The proponents of the settlement, i.e. Attorneys General, seemed to base
their opinions on the Settlement before even reading it. This was exemplified
on two accounts:
Statements made by Attorneys General about the content of the settlement
during the week of 11/16 were not entirely true after a thorough reading
of the Settlement (many were heard saying that under this settlement, "Joe
Camel is gone", "Marketing of brand name merchandise is gone",
etc.); and
Most Attorneys General appeared to have made up their minds about signing
the settlement by 11/16 or 11/17, yet the full settlement was unavailable
until the afternoon of 11/16. Considering its length and difficulty in
reading it (it is not indexed, etc.), it is doubtful a careful study of
it could be made in only 1 - 2 days, which was within the time frame many
Attorneys General had made up their mind, at least to other government officials.
The Tobacco Industry has lied to the American public for decades and
pushes a product which kills more people than any other product or disease
in this nation and in the world! Yet the American people were thrown over
a barrel by this Industry and the Attorneys General, and were powerless
to stand up and demand what is best for them!