Ironic: Arizona Cuts Low-Income Health Insurance Coverage Because Not Enough People Are Smoking

Raising money by 'sin taxes" has been very popular in the last few years. The strategy can be self-defeating though.

(Reason)- Arizona has a major public health problem: Too few people are smoking.

That’s not the only fiscal problem the state faces. But it’s one of them. Like many states, Arizona’s public finances are in miserable shape. And much of the state’s budget trouble can be attributed to a decade-old decision to finance an expansion of low-income health insurance coverage with revenue dependent on tobacco industry profits.

A little more than a decade ago, the state grew its low-income health insurance rolls, claiming the new enrollees would be paid for by revenue from a deal with tobacco industry. Now, with smoking rates (and tobacco industry revenues) falling, a budget crisis brewing, and a growing number of individuals eligible for Medicaid, the state has chosen to pare back its health coverage for low-income adults.