$4 billion tobacco settlement
New hope for seniors & disabled

When state attorneys general across the nation brought suit against the big tobacco corporations a few years ago to recover damages to the states caused by tobacco most people did not believe they could prevail.

Terry Kindrick
Terry Kindrick, of CAC's Fort Wayne office, was one of hundreds of Hoosiers who attended hearings on Indiana's $4 billion tobacco settlement. 

Today, however, the settlement is a reality. The tobacco industry has agreed to pay nearly $196 billion to the states over the twenty five years. Furthermore, the settlement has no ending date. As long as the major tobacco companies are in business they will continue to pay into the settlement to cover the obvious health care costs that they have created

With the reality of the settlement only slowly dawning on people many leaders and advocates for senior citizens and persons with disabilities have just recently begun to petition members of the General Assembly for a portion of the funding Indiana will receive. Under the terms of the tobacco settlement the General Assembly will determine how those dollars are used in Indiana.

Tobacco Hearing in Fort Wayne
In Fort Wayne, over 150 people braved winter weather to attend one of five hearings on how Indiana should spend $4 billion in federal tobacco settlement money.

GOP State Rep. Gloria Goeglein (R-Fort Wayne), sits next to Allen County Democratic Chair Brian Stier and his brother, elder law attorney Bruce Stier. Goeglein has long supported CHOICE in the general assembly; the Stiers' father, Jimmy, was a longtime CHOICE recipient and advocate. Brian Stier and Rep. Goeglein both spoke for using tobacco monies to fund CHOICE. 

The settlement money will total nearly four billion dollars in Indiana over the initial twenty five years of the agreement. In the year 2000 that will mean $130 million coming into the state’s treasury, followed by $141 million in the year 2001.

Through the Indiana Home Care Task Force, of which Citizens Action Coalition is a charter member, groups representing seniors and people with disabilities are now jointly coordinating their advocacy efforts per the proper use of the tobacco funds. This coordination lead to a series of press conferences across Indiana in October, to citizens lobbying the General Assembly during the "mini" session that was held in November, and to people continuing to communicate with legislators and Governor O’Bannon whenever the opportunity has been present.

According to Paul Severance, chair of the Task Force’s tobacco settlement subcommittee, Executive Director of United Senior Action and a CAC board member, the Task Force has the critical job of mobilizing its collective strength of organizations and people to persuade the General Assembly to comply with the spirit and the intent of the tobacco settlement. "The attorneys general across the nation envisioned the settlement dollars being targeted on the health care needs and costs of the people who have been the victims of tobacco use; as a means to compensate states for public costs associated with tobacco related diseases and addictions," stated Severance. He continued, "Given those parameters, the Task Force believes the tobacco monies in Indiana should be used for home and community based long term care services and for prescription drugs that the elderly and persons with disabilities are not receiving and cannot afford."

In practical terms the tobacco money cannot be seen as the only means for funding the long term care alternatives to nursing homes and the prescription drug services that so many indigent Hoosiers need regardless of their ages. The Task Force recognizes there simply are not enough tobacco settlement dollars to do everything. Consequently, it is advocating the following uses for the tobacco monies:

  • Fifty percent of the settlement dollars in Indiana should go to programs to provide health related services to senior citizens and other citizens with disabilities.

  • The funded services should be for long term care alternatives that are currently grossly under funded, such as the CHOICE and Medicaid waiver programs for home and community based long term care, and for similar services that receive no public funding, such as assisted living, adult foster care, and end of life hospice care.

  • The funded services should also include prescription drug programs for the elderly and persons with disabilities who currently cannot afford critically needed medications.

  • The remaining 50 percent of the settlement dollars should focus on mental health services, smoking prevention, and smoking cessation programs that all have a direct health benefit.

  • No tobacco funds should be used to underwrite nursing home care, or to replace current state and federal dollars that are used for that care. That industry is already over built with too little accountability for the tax dollars it already receives.

"Ultimately, the tobacco dollars must be seen as an excellent opportunity to establish home and community based long term care services in Indiana, and prescription drug services, that are presently grossly under funded or not funded," Severance stated. "However, the money from the settlement is simply not enough to meet all of the long term care needs of our citizens. That will take a fundamental restructuring of how we invest our tax dollars in long term care. We must not lose sight of that goal even while we are working very hard to get the General Assembly to adopt the Task Force plan for using the tobacco funds."

Others Who testified in favor of using tobacco monies to aid Indiana's elderly and disabled populations.

Allen Lauer

Margaurite Dearth

Allen Lauer representing retired letter carriers and federal employees.

AARP and United Senior Action activist Margaurite Dearth

Joe Firetag

Nick Heiney

AARP Fourth Congressional District Coordinator Joe Firetag

Nick Heiney of Fort Wayne's Mayor's Senior Advisory Council.

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