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Smokers to Be Taxed to Fund Healthcare for Uninsured

In a double blow for health, Indiana legislators in the US have decided on raising tax on cigarettes and channelizing the additional earnings towards healthcare. //

As per a deal agreed upon on Sunday, the state's cigarette tax would be hiked by 44 cents per pack and the expected additional flow to the treasury, of the order of 200 million dollars a year would help fund several health programs.

Most of the tax increase would be directed toward a plan to provide health care coverage for about 132,000 adults. The plan would be available to people without employer-provided health insurance and who earn less than double the federal poverty level.

Beneficiaries would get free preventive care each year, as well as insurance coverage and personal health accounts used for doctor visits and prescriptions.

Cigarette tax money also would be spent on vaccinations for children and smoking prevention and cessation programs.

The proposal also includes other health care initiatives, including a program that would permit certain employers to participate in plans that allow employees to pay for health care using pre-tax money. The bill also expands eligibility for Medicaid for pregnant women and for the Children's Health Insurance Program.

State health commissioner Judy Monroe said increasing the cigarette tax by 44 cents per pack would spur about 23,000 adults to quit smoking. She said the health care plan would reduce the number of people who wait too long to seek medical help because they do not have insurance.

Gov. Mitch Daniels has pushed for the increased cigarette tax and health care plan. Secretary Mitch Roob of the Family and Social Services Administration also has lobbied for the proposal.

But it had teetered on the edge of collapse in the final days of the session, as lawmakers disagreed on the amount of the cigarette tax and even suggested that the money should go for property tax relief instead of health programs.

"This is a terrific bill and we're extremely enthusiastic about it," Roob said.

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