February 27, 2004

GRAND RAPIDS – Governor Jennifer M. Granholm today cited a study commissioned by the Michigan Economic Development Corporation (MEDC) that says the unhealthy lifestyles of Michigan residents are driving up the cost of health care in Michigan, which is one more reason she is advocating that the state take proactive measures to reduce smoking in Michigan among adults and teens alike.

“This study makes it official:  Too many Michigan residents have unhealthy lifestyles, including smoking too much, which contribute to making Michigan among the least healthy states in the nation,” Granholm told the Grand Rapids Area Alliance for Health.  “While we know that people who lead a healthy lifestyle enjoy better health, we need to educate more of our residents about the direct relationship between their own health and the strength our economy.”

Governor Granholm said that making health care more accessible and affordable in Michigan is a critical component of her 7-point plan to grow Michigan’s economy and create new jobs for Michigan workers.
 
Granholm outlined two key initiatives announced in her 2004 State of the State Address to provide affordable health care options to Michigan citizens:  the new Michigan Prescription Discount Card, or MI-RX, and the Third Share Partnership for health care benefits. 

The MI-RX card will allow as many as 200,000 senior citizens and working people without insurance to cut the costs of their prescription drugs by as much as 20 percent. 
 
The Third Share Partnership, modeled after successful programs in Muskegon and Wayne Counties, will help small businesses offer health insurance to workers by dividing the cost of the health care premium between the employee, the employer, and the state, with the state’s third share coming in the form of a tax credit to the business.
 
“Michigan will become an economic powerhouse state in the 21st century,” Granholm said.  “We will grow our economy by giving businesses the tools they need to succeed and by improving the quality of life for all of our citizens.  To be an economic powerhouse, you can’t have one without the other.  Quality of life issues, including the affordability and accessibility to quality health care, are critical elements to Michigan’s future.”

Granholm also used her visit to Grand Rapids to underscore the necessity of a proposal in her 2005 budget that will increase Michigan’s cigarette tax by 75 cents per pack.  The proposal will do two critical things:  It will take a step toward reducing the state’s long-term health care costs by encouraging people to quit smoking and get healthier, and begin to help fill the $689 million hole the federal government has created in the state’s budget this year.
 
Specifically, the Governor’s proposal will generate $295 million, of which the first $30 million would be earmarked for the Healthy Michigan Fund to pay for smoking cessation and other anti-smoking related programs.  The remaining $265 million would be earmarked for the state’s Medicaid program.
 
“Michigan’s Medicaid program spends $881 million annually to treat the effects of smoking related illnesses,” Granholm explained.  “Every Michigan household pays $557 a year in state and federal taxes for smoking related illnesses.  To be an attractive place for new business and to protect our citizens, we must take steps to reduce these long term health care costs.  We can do that by encouraging people to quit smoking or to avoid starting to smoke.”

Studies show that raising the cigarette tax will mean 60,000 fewer adult smokers and 94,000 fewer smokers under age 18.  Without the additional revenue, Granholm said that she would otherwise be forced to cut health care for 200,000 pregnant women, seniors, and persons with disabilities.

Granholm also discussed other aspects of her 7-point plan to help grow Michigan’s economy, including a call for the federal government to pursue international trade policies that level the playing field for Michigan and U.S. businesses, initiatives to streamline permitting processes in Michigan, and establish three new capital funds to attract and grow businesses in Michigan.
 
The funds include the Emerging Business Fund, the Venture Michigan Fund, and the Small Business Growth Fund to leverage federal and private dollars to make more than half a billion dollars available for starting a new 21st century business.
 
Additionally, Granholm has proposed initiatives to aid Michigan’s manufacturing sector, provide interest-free loans to engineering and technology students, curb the use of credit scoring and end predatory lending practices, and stiffen legal penalties for those who prey on our seniors and vulnerable citizens.