Maryland lawmakers propose cigarette tax increase to fund health care programs

Maryland House leaders on Wednesday proposed a $1-per-pack cigarette tax increase to extend health insurance coverage to at least 250,000 uninsured state residents, the Washington Post reports.

The proposal would use an estimated $212 million annually from the cigarette tax increase to expand Medicaid eligibility (Rein, Washington Post, 2/8).

Under the proposal, income limits for adults would increase from 40% of the federal poverty level to 116% of the poverty level.

Medicaid eligibility for children would be expanded to those in families with incomes of up to 400% of the poverty level, and families with incomes greater than 200% of the poverty level would pay for Medicaid coverage based on a sliding scale.

The proposal would require state residents whose incomes are greater than 400% of the poverty level to purchase insurance or pay state penalties of up to $2,000 (Smitherman, Baltimore Sun, 2/8).

The plan also would provide $140 million in subsidies for health benefits to employers with fewer than 50 workers (Wyatt, AP/Washington Times, 2/8).

In addition, private insurers would be required to allow adults up to age 25 to remain covered by their parents' plan.

The proposal also would provide $40 million for substance abuse treatment and smoking cessation programs (Baltimore Sun, 2/8).

The plan would cost an estimated $603 million and would be funded by the cigarette tax increase, federal matching funds and savings from other programs (Washington Post, 2/8).

Rick Abbruzzese, a spokesperson for Maryland Gov. Martin O'Malley (D), said the governor was "not inclined" to support the tax increase (AP/Washington Times, 2/8).

State Senate leaders also oppose increasing the cigarette tax to fund health programs (Washington Post, 2/8).