HEALTH

Study: Smoking cessation can provide health, economic benefits to Calif., nation

BY Michael Johnsen

SACRAMENTO, Calif. A new study released Wednesday by the American Lung Association, and conducted by researchers at Penn State University, found that helping smokers quit not only saves lives but also offers favorable economic benefits to California and the nation.

“Smoking Cessation: The Economic Benefits” provides a nationwide cost-benefit analysis that compares the societal costs of smoking with the economic benefits of states providing cessation coverage.

There are an estimated 3.8 million people who smoke in California, and the study found that smoking results in costs to the California economy of more than $26 billion. This includes workplace productivity losses of nearly $6 billion, costs of premature death at more than $9 billion and direct medical expenditures of $11 billion.

The Penn State study also calculated the combined medical and premature death costs and workplace productivity losses per pack of cigarettes. The study showed that while the statewide average retail pack of cigarettes in California is $5.17, the true cost of a pack of cigarettes when considering healthcare impacts and workplace productivity losses is $27.07 per pack, a third higher than the $18.05 national average.

The American Lung Association study found that smoking cessation provided a tremendous return on investment for states. For every dollar spent on helping smokers quit, states will see, on average, a return of $1.26. However, the return on investment for California is among the highest in the country at $1.40. Comparative data for all states can be found at LungUSA.org/stop-smoking/tobacco-control-advocacy/reports-resources/cessation-economic-benefits/ .

The study came at an important time, as smoking-cessation provisions are being implemented at the federal level and in California as Senate Bill 220 is awaiting action by Gov. Arnold Schwarzenegger. Sponsored by the American Lung Association in California, the Cancer Society and the Heart Association, SB 220 would require all health plans and insurers to provide coverage of treatments to help people who smoke to quit smoking. If signed into law, SB 220 would represent the most comprehensive smoking-cessation benefits policy in the nation.

“Gov. Schwarzenegger has the opportunity to make a long-lasting difference in the health and lives of future generations of Californians, and we urge him to do so by signing SB 220 into law,” stated Jane Warner, president and CEO of the American Lung Association in California.

Some of the highest rates of smoking are found among people enrolled in Medicaid, the American Lung Association added. The American Lung Association urged California and every state in the nation to provide all Medicaid recipients and state employees with comprehensive, easily accessible tobacco-cessation benefits. A comprehensive cessation benefit includes all seven medications and three types of counseling recommended by the U.S. Public Health Service for tobacco cessation. Only six states now provide comprehensive coverage for Medicaid recipients: Indiana, Massachusetts, Minnesota, Nevada, Oregon and Pennsylvania.

 

The American Lung Association also recommends that private insurance plans and employers offer comprehensive cessation coverage, and encourages states to require them to cover these treatments. Only seven states have such requirements now: Colorado, Maryland, New Jersey, New Mexico, North Dakota, Oregon and Rhode Island.

 

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IRS’ updated FSA rules regarding OTC medicines draw response

BY Michael Johnsen

WASHINGTON The Internal Revenue Service earlier this month issued guidance reflecting statutory changes regarding the use of certain tax-favored arrangements, such as flexible spending arrangements, to pay for over-the-counter medicines and drugs.

The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements. Under the new standard, the cost of an OTC medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or such other healthcare expenses as medical devices, eye glasses, contact lenses, co-pays and deductibles, the agency stated. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 still can be reimbursed in 2011 if allowed by the employer’s plan.

WageWorks, a provider of consumer-directed benefits solutions, including FSAs, this past summer advocated an extension of that Jan. 1 deadline, arguing that all parties — consumers, retailers and third-party administrators — needed additional time to react to the changes. “This restriction will hurt millions of consumers who rely on their FSAs to manage their out-of-pocket healthcare costs and pay for necessary over-the-counter therapies,” stated Joe Jackson, CEO of WageWorks. “If Congress is intent on putting this provision into effect, they should at least push back the deadline so that consumers — and especially retailers — are ready for the transition.”

 

Jody Dietel, president and chair of the Special Interest Group for Inventory Information Approval System Standard said, “Without clarification on the type of permission needed for FSA reimbursement for OTC drugs, consumers, retailers and third-party administrators will be confused and unlikely to fully comply with the new regulations by the start of new year. Meanwhile, we’re likely to see doctor’s offices overwhelmed with patients seeking prescriptions to use their spending accounts for Claritin, Zyrtec and other OTC items,” she said. “A delay in implementation will provide time for all parties to be better educated on the issue and prepared to comply with the new rules.”

 

 

SGIS maintains an electronic list of FSA-eligible products used by most retailers in the country.

 

 

The new regulations, even the recent guidance issued by the IRS, leave many questions unanswered, according to a report on The Bulletin published last week. Will physician prescriptions be required to specify a number of pills with the prescription, or can consumers buy bulk-sized containers of pain relievers? And if pharmacies must process prescriptions for aspirin or cold medication, will they seek some dispensing fee for their time?

 

 

“We’re concerned that there will be a lot of confusion out there,” Jeff Beadle, CEO of SIGIS, told The Bulletin. “Someone is buying Tylenol in December, and they can’t now buy Tylenol in January unless they go to their doctor and get a prescription first.”

 

 

The report suggested retailers will face an additional challenge — when to update the list of eligible products under FSA plans because many FSA plans do not run on a calendar year.

 

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RC2’s The First Years brand inks deal with Natus Medical

BY Allison Cerra

OAK BROOK, Ill. A brand made by RC2 has inked a product licensing agreement with a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care.

As part of the deal, Natus Medical will manufacture and distribute a line of The First Years brand’s GumDrop pacifiers, accessories and other related items. The First Years’ GumDrop product line is slated to debut at retail in early 2011.

GumDrop pacifiers are available in two sizes, newborn (0 to 3 months) and infant, and come in playful green, blue, orange, pink and purple colors. In addition to pacifiers, The First Years’ GumDrop line will include pacifier clips and cases.

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