Medicare, Medicaid, And The Social Cost Of Smoking

Abstract

Not all medical expenses are paid through insurance. A significant share is provided by government, most of which in turn is provided through Medicare, which primarily finances medical care for social security recipients. Government also provides medical care for the indigent under Medicaid. In both of these cases the medical care is financed by taxpayers, with the beneficiaries being the recipients of the care. It might seem as though governmentally provided medical care offers a means for smokers to impose costs on nonsmokers. A commonly expressed sentiment is that everyone has an interest in smoking because such programs as Medicaid and Medicare cover a significant part of the medical bills for smokers. This sentiment was illustrated by the claim in the 11 May 1982 issue of the Wall Street Journal that “Uncle Sam has a budgetary interest in the cigarette toll [on health] because Medicaid and Medicare pick up a significant part of the medical bills for afflicted smokers.” If smoking damages health, increased claims under Medicare and Medicaid seem a distinct possibility. Indeed, this possible positive relationship between smoking and resulting claims under Medicare and Medicaid has been used to advocate the earmarking of tobacco tax revenues for the support of Medicare.