Oct. 10 2005
Washington, DC — Governor Arnold Schwarzenegger’s veto of legislation requiring that all health insurance plans in California provide coverage for medication and counseling to help smokers quit will cost thousands of lives and billions of dollars in healthcare costs.
Contrary to Governor Schwarzenegger’s claim in his veto message that this legislation would cost employers, health plans and individuals money, even health plans have admitted that the legislation would actually save money by reducing smoking-related health care costs. An economic model developed by Kaiser Permanente’s Center for Health Research and America’s Health Insurance Plans found that under this legislation health plans would have saved $1.4 billion over the first five years. Employers would have begun saving money immediately, and state-run, taxpayer-financed health insurance programs such as CalPERS would have benefited as well. Few, if any, pieces of legislation would have delivered such a dramatic and immediate return on investment. Californians will pay a significant price in health, lives and money because of Governor Schwarzenegger’s shortsighted veto of this legislation.
This legislation was a responsible, business-friendly response to the growing problem of tobacco-related health care costs facing insurers and employers in California and across the country. In California alone, tobacco-related healthcare costs total $8.6 billion per year, and the total economic burden of tobacco increases to $15.8 billion when lost productivity and other costs are added. The logical solution to reducing this tremendous financial burden is to help smokers quit, thereby reducing the billions of dollars that businesses, insurers and taxpayers shell out to treat tobacco-caused disease. According to the Centers for Disease Control and Prevention, “Tobacco cessation is more cost-effective than other common and covered disease prevention programs, such as the treatment of hypertension and high blood cholesterol.”
Unfortunately, Governor Schwarzenegger and other opponents of the legislation overlooked this logic and missed an opportunity to save money and lives because of knee-jerk opposition to so-called “mandates.” This is a different kind of mandate that deserved strong support from businesses and elected leaders because of the clear evidence that it would save employers, government and taxpayers billions of dollars. In addition, the voluntary approach to expanding smoking cessation coverage advocated by the Governor in his veto message is not enough. Only a requirement that all health plans provide this coverage would level the playing field and address concerns that a plan will pay for a member to quit smoking, but not realize the savings if the member switches to different plan.
While Governor Schwarzenegger is correct that California has made tremendous progress in reducing smoking, he leaves out that 4.2 million California adults still smoke. Studies show that about 75 percent of these smokers want to quit and more than 60 percent try each year. Without help, only about five percent (or less) succeed in quitting each year. The use of scientifically proven smoking cessation therapies, including medication and counseling, can more than triple this success rate. The vetoed legislation would have required that all health plans provide comprehensive coverage for these smoking cessation treatments. It would have provided coverage for two courses of smoking cessation treatment in a 12-month period, including personal counseling (via telephone or in-person) and FDA-approved medication for smoking cessation, including prescription and over-the-counter medication.
California has long led the nation and the world in taking innovative action to reduce tobacco use and its devastating consequences. It is disappointing that Governor Schwarzenegger has missed the opportunity to take another historic step that would not only save lives and improve health, but save billions of dollars as well. We commend State Senator Deborah Ortiz for her leadership in introducing this legislation and the Legislature for its foresight in passing it. We urge the Legislature to override the veto or, failing that, to pass this legislation again next year, and we urge Governor Schwarzenegger to reconsider his opposition.