How Good a Deal Was the Tobacco Settlement?: Assessing Payments to Massachusetts

38 Pages Posted: 22 Jul 2000 Last revised: 4 Sep 2015

See all articles by David M. Cutler

David M. Cutler

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Arnold M. Epstein

Harvard University - T.H. Chan School of Public Health

Richard G. Frank

Harvard Medical School; National Bureau of Economic Research (NBER)

Raymond S. Hartman

Greylock McKinnon Associates

Charles King

Greylock McKinnon Associates; Pleiades Consulting Group, Inc.

Joseph P. Newhouse

Harvard Medical School; Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Meredith B. Rosenthal

Harvard University - T.H. Chan School of Public Health

Elizabeth Richardson Vigdor

University of Washington - Evans School

Date Written: June 2000

Abstract

We estimate the increment in Massachusetts Medicaid program costs attributable to smoking from December 20, 1991, to 1998. We describe how our methods improve upon earlier estimates of analogous costs at the national level. Current costs to the Massachusetts Medicaid program approximate the payments to Massachusetts under the tobacco settlement of November 1998. Whether these payments are viewed as appropriate compensation for Medicaid costs over time depends upon the rate of increase in future health care costs, the rate of decline in smoking, the proportion of smoking that should be attributed to the actions of the tobacco companies and the liklihood that state would have prevailed at trial. The costs to the Medicaid program are dwarfed by the internal costs to smokers themselves.

Suggested Citation

Cutler, David M. and Epstein, Arnold M. and Frank, Richard G. and Hartman, Raymond S. and King, Charles (Kip) and Newhouse, Joseph P. and Rosenthal, Meredith B. and Richardson Vigdor, Elizabeth, How Good a Deal Was the Tobacco Settlement?: Assessing Payments to Massachusetts (June 2000). NBER Working Paper No. w7747. Available at SSRN: https://ssrn.com/abstract=233750

David M. Cutler (Contact Author)

Harvard University - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Harvard University - Harvard Kennedy School (HKS) ( email )

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Arnold M. Epstein

Harvard University - T.H. Chan School of Public Health ( email )

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Richard G. Frank

Harvard Medical School ( email )

Department of Health Care Policy
Boston, MA 02115
United States
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National Bureau of Economic Research (NBER)

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Raymond S. Hartman

Greylock McKinnon Associates ( email )

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Charles (Kip) King

Greylock McKinnon Associates ( email )

One Memorial Drive
Cambridge, MA 02142
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617-871-6900 (Phone)
617-871-6949 (Fax)

Pleiades Consulting Group, Inc. ( email )

P.O. Box 531
Lincoln, MA 01773
United States

Joseph P. Newhouse

Harvard Medical School; Harvard Kennedy School (HKS) ( email )

Department of Health Care Policy
Boston, MA 02115
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Meredith B. Rosenthal

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA MA 02115
United States

Elizabeth Richardson Vigdor

University of Washington - Evans School ( email )

Seattle, WA 98125
United States

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