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Health care professionals warn of dire consequences if cigarette tax does not pass

OKLAHOMA CITY - “Here we are again,” said Craig Jones, president of the Oklahoma Hospital Association, as he held a press conference at the capitol Tuesday morning.

Health care professionals have tried before, but they said the time for action is now.

“74 percent of Oklahomans agree with us. The will of the people is evident. It’s now time for the legislature to act,” Jones said.

They are asking lawmakers to pass the law which would increase the tax on a pack of cigarettes by $1.50.

And, they are warning lawmakers, if the cigarette tax fails, more than a dozen hospitals and one out of 10 nursing homes would close.

“I’m currently working with seven hospitals in the state of Oklahoma right now that are living payroll to payroll. Every week, we decide how we can make payroll this week,” said Rick Wagner, a CPA working with rural Oklahoma hospitals.

This is all part of the larger problem of the state budget.

The Oklahoma Health Care Authority has told Medicaid providers, if their budget is cut, they will have to turn around and cut rates to those who care for Medicaid patients.

It’s something that many rural hospitals said would be devastating.

“It would be a major blow to our community to lose our hospital,” said Roberta Jeffrey with Holdenville General Hospital.

Jeffrey said, if more cuts go into effect and new revenue streams are not identified, their hospital could close within six months to a year.

“We’ve had to eat into our cash reserves to try to stay solvent, and those cash reserves are dwindling,” Jeffrey said.

Last year, democrats blocked the cigarette tax from passing.

"The cigarette tax only stabilizes reimbursement rates for hospitals, but it doesn't cover one new person with health insurance. And, as long as that is the case, you could raise cigarette taxes to $5 extra pack and it still wouldn't solve the problem facing rural hospitals in Oklahoma,” said House Minority Leader Scott Inman.

Inman said they’re willing to support it this year if republicans take a look at the broader picture.

"Our caucus has said we are willing to work with the republicans in charge to help pass a cigarette tax if they are willing to address the real structural problems in our budget, things like gross production taxes, income tax cuts, Insure Oklahoma expansion,” Inman said.

Advocates said the tax could raise $184 million a year for health care in our state.

But, opponents said it is simply a tax on a low income segment of the population, and they point out the state could lose revenues along our borders if smokers cross state lines to buy cigarettes and avoid the higher tax.

HB 1841 passed unanimously out of committee back in February but has not yet been voted on in the full House.