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E-Cigarettes Poised to Save Medicaid Billions

E-Cigarettes Poised to Save Medicaid Billions

ELECTRONIC CIGARETTEElectronic cigarettes, sometimes called e-cigarettes or, simply, e-cigs, are not actually cigarettes in the conventional understanding of the word. They do not contain tobacco but use a battery-powered vaporizer to deliver nicotine to the body via a process known as “vaping”. The vapor is inhaled like a smoke from a cigarette, but does not contain the toxic additives found in tobacco smoke.

E-cigarettes have been sold in the US since 2006, with a major part of the marketing message aimed at smokers who want to release themselves from their dependence on tobacco. They are encouraged by the fact that numerous scientific studies have shown that e-cigs reduce the harm from smoking and help wean smokers away from tobacco.

A major reason for the success of e-cigarettes is that, unlike traditional nicotine replacement therapy (NRT), such as gum or patches, e-cigs mimic the physical action of smoking a cigarette. E-cigs satisfy both the need for nicotine and provide the physical stimuli of smoking.

Inevitably, the fact that e-cigarettes provide a healthier alternative to tobacco will impact the Medicaid system by lowering healthcare costs associated with the effects of tobacco and tobacco smoke. One reason is that Medicaid users have a smoking level double that of the general public (51% versus 21%, respectively).

Medicaid spending potential savings if e-cigs replace tobacco

A comprehensive study on the impact of cigarette smoking on Medicaid spending showed potential savings of $48 billion in Fiscal Year 2012 if e-cigs were to replace tobacco. Astonishingly, this saving is 87% higher than all state cigarette tax collections and tobacco settlement collections ($24.4 billion) collected in that same year.

Medicaid and healthcare professionals e-cigs savings

Despite this obvious benefit, Medicaid and many healthcare professionals are concerned that a combination of negative publicity and Government intervention through bodies like the FDA will slow the move to e-cigarettes. Given the reality of the long-term fiscal challenges facing Medicaid, it believes that the prospect of large e-cigs cost savings is worth a non-interventionist approach until or unless hard evidence proves otherwise.

The facts regarding the cost to the economy of smoking in lost productivity and increased healthcare expense speak for themselves. For example, in 2009, the economic loss due to people who died prematurely, or missed time from work due to smoking was $185 billion in lost output. Of course, smokers incur higher healthcare costs when they require medical services such as ambulatory care, hospital care, prescriptions, and neonatal care for conditions caused by smoking. This cost the economy $116 billion in extra medical treatments.

With a major portion of the healthcare costs being borne by Medicaid, the billions of dollars which could be saved by encouraging the move to e-cigarettes is obvious. Hopefully, the government will consider the implications of any restrictive legislation taking this into account.