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A review of WalletHub's list of the least expensive states to smoke shows there's a definite relationship between the cost of lighting up and high rates of smoking among adults, based on CDC data.
For smokers who pledged to kick the habit on New Year’s Day, this might the time when it’s getting tough. With that in mind, WalletHub today published a report, “The True Costs of Smoking by State.”
The report gives smokers and policy leaders alike some numbers to think about—either when deciding to buy that pack or when setting tobacco taxes, which studies show are the best way to get people to quit.
“The most effective strategy to reduce smoking is to raise the price of the product,” Roger Feldman, professor of health policy and management, School of Public Health, University of Minnesota, told WalletHub. “This has been demonstrated repeatedly.” Clean indoor air acts also work well, he said.
CDC data suggest there’s definitely a relationship between the high rates of smoking and how much the habit costs. Four of the 5 states with the highest rates of smoking among adults—between 23.9% and 27.3%, based on 2013 surveys—are among WalletHub’s 10 least expensive states to be a smoker. They are West Virginia, Kentucky, Mississippi, and Tennessee.
And 3 of the remaining top 10—Louisiana, Missouri, and Alabama—have adult smoking rates between 20.5% and 23.9%. Louisiana and Alabama just recently raised tobacco taxes.
For the lifetime costs of smoking, WalletHub based its calculation on a formula that included out-of-pocket costs for buying cigarettes, the financial opportunity costs if that money had been invested, the healthcare costs of being a smoker based on CDC estimates, and income losses associated with smoking (including lost productivity). A study by the Federal Reserve Bank of Atlanta has found that smokers earn up to 20% less than nonsmokers.
Other costs in the formula include higher homeowners’ premiums and the costs of being around secondhand smoke.
So what are the least expensive states for smoking?
1. Louisiana. WalletHub confirmed that its out-of-pocket costs are based on 2014 data, so the list doesn’t reflect a very recent 50 cent-per-pack tobacco tax that former Governor Bobby Jindal signed before leaving office last year. The state previously had the third-lowest tobacco tax. The funds are to be used for healthcare.
2. Kentucky. Tobacco is part of the culture here, and it contributes to high cancer rates. The state’s Chamber of Commerce is taking a stand in the current discussion to revamp Medicaid expansion—it wants to pass a law to outlaw smoking in all workplaces. The Chamber believes this will compel newer Medicaid recipients to use the smoking cessation tools available to them, instead leaving Medicaid to pay for them to fall ill with more serious diseases. Some say smokers should also pay higher Medicaid premiums. This is permitted under the Affordable Care Act.
3. Missouri. Recent efforts to raise the state’s tobacco tax failed, but a business-led initiative to raise the age of purchase, called Tobacco21, succeeded in Kansas City and Independence.
4. West Virginia. Discussions to raise the cigarette tax here have focused on putting retailers who border Kentucky or Virginia at a disadvantage, with proponents of the higher tax saying it’s more important to create a healthy workforce.
5. North Carolina. As in Kentucky, tobacco has been an export since the Colonial era. It scores an “F” rating in all areas of the American Lung Association for State of Tobacco Control: tax rate, smoking cessation programs, smoke-free air, and tobacco prevention.
6. Georgia. The state’s tax of 37 cents per pack doesn’t just affect its own smokers. Based on early returns, it appears that smokers in Alabama, who just saw their cigarette tax raised to 67 cents, are driving next door to buy tobacco and avoid higher costs.
7. Tennessee. The tax rate here is 62 cents a pack. But critics of the state’s efforts say it has no indoor air laws covering restaurants or even workplaces, and spends very little on prevention.
8. South Carolina. A group called the South Carolina Tobacco-Free Collaborative is trying to get the tax per pack up to $1.57 by 2018. It took years to get 50 added to the tax in 2010, so it might be an uphill battle. But the group showed that effort cut high school smoking by 35%.
9. Mississippi. The state that was the birthplace of the master settlement agreement against the nation’s tobacco companies still has one of the nation’s highest smoking rates, and lowest costs to keep up the habit.
10. Alabama. As with Louisiana, the WalletHub survey doesn’t reflect the 25 cent per pack increase that took effect with the new year.
The 10 most expensive states to be a smoker? They are, in order: New York, Massachusetts, Alaska, Hawaii, Connecticut, Rhode Island, Minnesota, Washington, New Jersey, and the District of Columbia.
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