UPDATED STUDY SHOWS HOOSIER SMOKERS’ HEALTHCARE COSTS INDIANA TAXPAYERS $540 MILLION MORE ANNUALLY

Richard M. Fairbanks Foundation updates recent study to capture the full cost of Indiana adult smokers on Medicaid

INDIANAPOLIS (April 5, 2017)—A new version of a study released last month showing the cost difference between Hoosier smokers and non-smokers on Medicaid reveals that the gap is significantly higher – $540 million – when younger smokers are included in the calculation.

The updated report, released today by the Richard M. Fairbanks Foundation, shows that Hoosier taxpayers spend 51 percent more on smokers who receive Medicaid compared to non-smokers on the publicly funded health program. That amounts to an annual difference of $3,864 per smoker, or a total of $540 million annually.

The new findings build upon a report released by the Foundation last month, which showed the annual healthcare cost borne by Indiana taxpayers for smokers was 40 percent higher than the cost for non-smokers, amounting to an annual difference of $350 million. But the original study only examined Hoosier Medicaid recipients ages 35 to 64, while the new analysis incorporates data for Hoosiers on Medicaid between the ages of 18 and 64.

Including costs for 18- to 34-year-old Medicaid recipients was important, the Foundation found, since according to the study, this group had a sizeable gap in healthcare expenditures between smokers and non-smokers. For men in this cohort, the difference was 37 percent, and for women in the same age group, it was 64 percent.

“Given the significant cost gap between younger Hoosier smokers and non-smokers on Medicaid, we thought it was important to incorporate the youngest adults into our analysis to fully capture the additional cost that every taxpayer bears because of smoking,” said Claire Fiddian-Green, President and CEO of the Richard M. Fairbanks Foundation. “This updated study gives us an even clearer picture of the economic toll that Indiana’s tobacco addiction has on all of us – regardless of whether or not you smoke.”

Though smoking rates have declined nationally in the last decade, it remains the leading preventable cause of disease and death in the U.S. Smoking rates tend to be especially high among Medicaid recipients.

A separate study released last fall by the Richard M. Fairbanks Foundation showed that more than 11,000 Hoosiers die prematurely each year due to smoking, and more than 1,400 die prematurely from secondhand smoke. There’s a sizeable business cost to smoking, too, with Hoosier employers spending $2.6 billion each year on smoking-linked expenses like absenteeism, disability claims and lost productivity. The report also describes evidence-based approaches to combatting tobacco addiction in Indiana.

When incorporating the data for 18- to 34-year-olds, the new study showed that 36 percent of smokers receiving Medicaid experience health complications linked to smoking, such as cancer, stroke, diabetes and heart disease. The prevalence of these conditions is lower – 19 percent – among non-smokers on Medicaid.

“The health toll of smoking alone should propel us to address the tobacco epidemic in our state,” Fiddian-Green said. “But if that’s not enough, it’s now clearer than ever that there’s a strong economic imperative to address the challenge, too.”

ABOUT THE RICHARD M. FAIRBANKS FOUNDATION
The Richard M. Fairbanks Foundation strives to advance the vitality of Indianapolis and the wellbeing of its people by addressing the city’s most significant challenges and opportunities. The Foundation is focused on three issue-areas: education, tobacco and opioid addiction, and the life-sciences. To advance its work, the Foundation implements a three-pronged approach: strategic grantmaking, evidence-based advocacy, and cross-sector collaborations and convenings. Learn more at RMFF.org.

ABOUT SVC, INC.
Established in 2001, SVC, Inc. is a multi-state healthcare consulting company with specialties in supporting state governments and associated entities with healthcare policy issues, including public health, Medicaid, Medicaid managed care, and health insurance policy initiatives. Clients include both private and public sector clients including state Governor’s offices, Medicaid programs, Departments of Insurance and Public Health, private foundations, and private companies that service state health agencies. SVC’s staff is a multi-disciplinary team with legal, regulatory, policy, research, social work and business operations expertise.