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It's Everybody's Money Going Up In Smoke


Economic Trends

IT'S EVERYBODY'S MONEY GOING UP IN SMOKE

How much do nonsmokers shell out for the health care of smokers? In recent testimony before Congress, economist Jeffrey Harris of Massachusetts Institute of Technology, who is also a physician, provides some estimates.

Cigarettes, says Harris, are responsible for 20% of deaths in the U.S. and roughly 8% of all health-care spending. Assuming universal coverage by 1995, he expects medical expenditures that year to reach $1.1 trillion and smoking-related outlays to hit $88 billion. Of that, he says, only $33 billion will be borne by current and former smokers via insurance, taxes, and direct payments. Nonsmokers will pay the other $55 billion.

Harris figures that for every pack of cigarettes sold in 1995, nonsmokers will pony up $2.32 to help cover the nation's smoking-related medical bill. In short, he says, "although it could cut consumption by as much as 12% over time, the Administration's proposed 75 -a-pack hike in federal excise taxes, plus the current 24 federal tax, wouldn't come close to offsetting the costs imposed by smokers on the 63% of Americans who never acquired the habit."GENE KORETZ


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