For more information contact:

John D. Law, Director
Office of Communications
West Virginia Department of Health and Human Resources


For immediate release

Cigarette tax passage will prevent deep Medicaid cuts, job loss

Unless the West Virginia Legislature approves a tax increase on cigarettes, West Virginia Secretary of Health and Human Resources Paul Nusbaum told legislators that drastic cuts will take place in the state’s Medicaid program, which is projecting a $250 million deficit. Nusbaum said these cuts will be felt in the private sector, particularly in hospitals and nursing homes. Hospitals and nursing homes receive a large portion of their reimbursement from the Medicaid program.

If the cigarette tax passes, it is expected to generate nearly $60 million in revenues, which will be matched 3:1 with funds from the federal government to pay for health care services for the poor and needy in West Virginia. Governor Bob Wise, in his state-of-the-state address said all the new revenue from the cigarette tax would go to help rescue the Medicaid program. "These funds," Nusbaum said, "along with some cost-cutting measures will keep the program solvent and keep jobs in a major sector of West Virginia’s economy."

Medicaid spends $1.5 billion each year in West Virginia and generates 32,681 actual jobs, according to a West Virginia University Department of Business and Economics study. Nusbaum said cuts to the program could take $225,639,556 out of the economy and cause the loss of 4,906 jobs on a statewide basis.