State Auditor General Jack Wagner is calling for statewide hearings on how the commonwealth should spend its tobacco settlement money.
The General Assembly has diverted $1.34 billion, or 30 percent, of the settlement fund payments it has received since 1999 to plug budget holes, according to a report the auditor general’s office released this month.
Wagner has suggested Gov. Tom Corbett and the legislature use the money as intended by the Tobacco Settlement Act of 2001, which was proposed and approved by former then-Gov. Tom Ridge and the General Assembly. The funding is to be used for smoking cessation and prevention programs, adultBasic health insurance and cancer research, Wagner’s office said Monday.
More than 40,000 Pennsylvanians who didn’t qualify for Medicaid lost state-subsidized health insurance coverage Feb. 28 when funding for it ran out. Those who enroll in adultBasic cannot afford private health insurance but earn too much money to qualify for Medicaid, Wagner said. When the state ended adultBasic, there were more than 500,000 residents on the program’s waiting list, he said.
Incoming tobacco settlement money should be used for adultBasic until 2014, when federal health care reform takes effect, Wagner said. The state also should look for additional public and private funds for the program if it is needed, he said.
Over the past six years, lawmakers superseded mandates of the Tobacco Settlement Act with language that diverted funds to other budget categories, Wagner’s office said.
The state was one of 46 states that settled with five major tobacco companies in 1998 to receive medical payments for Medicaid enrollees with illnesses related to the use of tobacco. The companies agreed to pay the commonwealth $370 million annually from 2000 to 2025, according to Wagner’s office.