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January 2012 St@teside

Saving Money in Medicaid: ROI for Smoking Cessation Program in Massachusetts

A new study published by The George Washington University shows that the implementation of a tobacco cessation program in Massachusetts Medicaid program saved the state $3.12 for every $1 invested in the program on cardiovascular-related hospital admissions alone.  The savings were realized within the first 16 months after the smoking cessation program began, suggesting that states can see immediate savings from implementing similar programs.

Massachusetts Medicaid implemented the tobacco cessation program in 2006, providing comprehensive tobacco cessation medications and services to enrollees. Beneficiaries could obtain FDA-approved smoking cessation medications with a copayment ranging from $1 to $3 per month and up to five sessions of free telephone counseling.

The study is among the first to look at short-term savings of anti-smoking programs in Medicaid1. It can be particularly useful for state Medicaid directors who are more concerned with short-term savings, given that they do not know how long beneficiaries will remain covered by Medicaid and that fiscal concerns lead to pressure for near-term savings.

The estimates from the study are conservative since the authors only measured short-term benefits associated with reductions in inpatient hospital admissions due to cardiovascular conditions. Nonetheless, the evidence suggests that long term savings and improved health outcomes may occur2.

The Affordable Care Act requires all states to provide a comprehensive cessation benefit to pregnant women enrolled in Medicaid. Beginning in 2014, states will have to include tobacco cessation medications in their drug coverage. 

1Vestal, C. (2012, January 13). Medicaid anti-smoking program saved big money, study says. Health Beat. Retrieved on January 20, 2012, from
2PR Newswire. New Study: Massachusetts Program to Help Medicaid Smokers Quit Saves $3 for every $1 Spent.  Retrieved on January 20, 2012 from