Wednesday, 23 May 2007
Indiana Raises Cigarette Tax To Help Healthcare Costs
Indiana Governor Mitch Daniels recently signed legislation increasing state cigarette taxes 44 cents a pack. The higher taxes will fund state-sponsored health insurance programs to help more Indiana residents get coverage.
The tax increase goes into effect July 1, and should increase government funds by around $200 million a year.
As result of the increased funds, the state will be able to implement a plan to help uninsured Indiana residents get health coverage.
The bill will create a health plan aimed at people 200% of the poverty level — which is $19,600 for an individual and $40,000 for a family of 4. Many people at this income level aren’t eligible for Medicaid and other government-sponsored programs — but also can’t afford private health plans.
Coverage itself will include up to $500 in preventive care and a Health Savings Account where plan members must save $1,100. If they can’t afford to save the full amount, the state will provide the needed funds to get to $1,100.
The money in the Health Savings Account will be used for most of their medical expenses — including doctors’ fees and hospital care. Once members spend $1,100, the plan will pay for any additional care — up to $300,000 annually.
The health plan will be provided by participating private insurance companies.
Programs providing health insurance for low-income children and pregnant women would also be expanded, as long as the State Congress provides approval.
“Today we are taking a long step toward a dream of a healthier Indiana,” said Governor Daniels to a crowd of about 300 people at the Statehouse. “We are taking, I think it’s fair to say, the longest single step Indiana has ever taken in this direction.”
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