The Tobacco Settlement Fund has provided funding for health care insurance for the uninsured, home and community-based services for older Pennsylvanians, tobacco use prevention and cessation programs, broad-based health research, medical care for workers with disabilities, uncompensated hospital care, and prescription drug coverage for older Pennsylvanians.
Full Answer
What is the tobacco settlement?
This court settlement between 46 states and the District of Columbia and the major tobacco companies forced them to end some of their more egregious marketing practices and provided for annual payments to the states for some of the medical costs of caring for the 16 million Americans who have smoking-caused illnesses.
What is the tobacco settlement permanent trust account (TSPA)?
The 76th Texas Legislature created the Tobacco Settlement Permanent Trust Account as a cooperative project between the Texas Department of Health (now DSHS) and the State Comptroller of Public Accounts in order to provide local health departments and hospital districts a portion of the payments from the state's tobacco settlement.
What is the National Tobacco Growers' Settlement Trust Fund?
The next year, the major cigarette manufacturers settled with the tobacco-growing states to compensate tobacco growers for losses they were expected to suffer due to the higher cigarette prices resulting from the earlier settlements. Called the "Phase II" settlement, this agreement created the National Tobacco Growers' Settlement Trust Fund.
What was the tobacco settlement in Mississippi?
Tobacco Settlement. Led by Mississippi Attorney General Mike Moore, attorneys general from a number of states announced a settlement reached with the tobacco industry. The settlement created a trust fund to pay for medical costs resulting from tobacco addiction and ended the suits by several states and individuals for payment of such medical costs.
What is tobacco settlement?
Under the Master Settlement Agreement, seven tobacco companies agreed to change the way they market tobacco products and to pay the states an estimated $206 billion.
What was the result of the 1998 tobacco settlement?
In the largest civil litigation settlement in U.S. history, the states and territories scored a victory that resulted in the tobacco companies paying the states and territories billions of dollars in yearly installments.
What was the purpose of the tobacco lawsuit case that resulted in the tobacco Master settlement?
to create and fund the National Public Education Foundation, dedicated to reducing youth smoking and preventing diseases associated with smoking. to make annual payments to the settling states in perpetuity.
How does the tobacco settlement money help disease prevention and health promotion?
The American Lung Association believes that states must use these tobacco settlement dollars, which are intended to compensate states for the healthcare costs from treating sick smokers and former smokers, and revenue from tobacco taxes to fund robust tobacco prevention programs to help tackle the #1 preventable cause ...
Can you sue tobacco companies for COPD?
Yes, you can still sue tobacco companies in certain cases. You may be able to bring an action as an individual or, in some cases, as a representative of a class in a class action.
When was the tobacco lawsuit settled?
In 1998, 52 state and territory attorneys general signed the Master Settlement Agreement (MSA) with the four largest tobacco companies in the U.S. to settle dozens of state lawsuits brought to recover billions of dollars in health care costs associated with treating smoking-related illnesses.
Who won the tobacco lawsuit?
In 2006, the American Cancer Society and other plaintiffs won a major court case against Big Tobacco. Judge Gladys Kessler found tobacco companies guilty of lying to the American public about the deadly effects of cigarettes and secondhand smoke.
What happened with the tobacco court case?
The High Court of Australia ruling By a majority of six to one, the High Court rejected the tobacco companies' arguments that there had been an acquisition of property under the Australian Constitution.
What effect did the settlement have on tobacco sold in the US?
Revenues from domestic sales of tobacco products increased after the MSA was reached, and profits from this source increased as well. Although overall domestic consumption of cigarettes decreased,22 the cigarette price increases more than offset such declines.
Where did tobacco originally come from?
Tobacco is derived from the leaves of the genus Nicotiana, a plant from the night-shade family, indigenous to North and South America. Archeological studies suggest the use of tobacco in around first century BC, when Maya people of Central America used tobacco leaves for smoking, in sacred and religious ceremonies.
How many harmful substances are in tobacco?
Tobacco smoke contains many chemicals that are harmful to both smokers and nonsmokers. Breathing even a little tobacco smoke can be harmful (1-4). Of the more than 7,000 chemicals in tobacco smoke, at least 250 are known to be harmful, including hydrogen cyanide, carbon monoxide, and ammonia (1, 2, 5).
What's another name for environmental tobacco smoke?
(en-VY-run-MEN-tul tuh-BA-koh ...) Smoke that comes from the burning of a tobacco product and smoke that is exhaled by smokers. Inhaling environmental tobacco smoke is called involuntary or passive smoking. Also called ETS and secondhand smoke.
What effect did the settlement have on tobacco sold in the US?
Revenues from domestic sales of tobacco products increased after the MSA was reached, and profits from this source increased as well. Although overall domestic consumption of cigarettes decreased,22 the cigarette price increases more than offset such declines.
Who was the first European to encounter tobacco plants?
Christopher Columbus1492 – Christopher Columbus first encounters dried tobacco leaves. They were given to him as a gift by the American Indians. 1492 – Tobacco plant and smoking introduced to Europeans.
What kinds of comparisons can you draw between vaping and smoking cigarettes?
Smoking. The difference between smoking and vaping is that smoking delivers nicotine by burning tobacco, which can cause smoking-related illnesses, and vaping can deliver nicotine by heating a liquid in a much less harmful way.
What is mainstream smoke?
(MAYN-streem ...) Tobacco smoke that is exhaled by smokers. Mainstream smoke can be a form of secondhand smoke. It contains nicotine and many harmful, cancer-causing chemicals. Inhaling mainstream smoke increases the risk of lung cancer and may increase the risk of other types of cancer.
What is the likelihood of payment on a tobacco settlement bond?
So long as the payment stream is maintained under the MSA to the states, the likelihood of payment on tobacco settlement bonds relies solely on those payments . The structure of each tobacco settlement bond financing was based on “worst case” scenarios assuming the payment stream is less than expected, and was designed to still pay debt service in a timely fashion. Through “over collateralization,” tobacco settlement bond issuers have pledged funding from their MSA payments sufficiently in excess of the amount necessary to meet debt service requirements so as to withstand a variety of dire scenarios, including the bankruptcy of a major tobacco company.
How are tobacco bonds rated?
Tobacco bonds have generally been rated based on each agency’s opinion of the tobacco industry’s credit quality overall, as well as specific collateral issues present in each financing. Since Philip Morris represents approximately half of domestic tobacco sales, its fortunes serve, in many ways, as a proxy for the industry overall. As a result, a change in PM’s ratings may cause unwarranted rating adjustments for tobacco securitization bonds as well.
Why are Philip Morris ratings based on the tobacco industry?
Ratings on Philip Morris are a proxy for ratings on the tobacco industry because of Philip Morris’ leading market position. Tobacco settlement bonds are not a direct obligation of tobacco companies, but are payable from the MSA settlement stream payable to each state. There is a strong disincentive for tobacco companies to withdraw from the MSA during a bankruptcy, since the flood of new lawsuits would serve only to dramatically decrease those companies’ financial flexibility even further. Finally, bond ratings on tobacco settlement bonds are based on the rating of the tobacco companies, not on the strength of the MSA revenue stream, as we think they should be. We know of no other bond where the ratings are so disconnected from the underlying security as in this case.
What are the contingencies of securitized settlements?
The financings that have securitized those settlements provide for a number of contingencies, including tobacco company bankruptcies, market shifts among tobacco companies and a decline in smoking. Typically, bond issues carry ratings reflecting the borrower’s business prospects, financial strength and debt burden.
How long did the Master Settlement Agreement last?
The Master Settlement Agreement (MSA) was signed by the tobacco industry and 46 states and four territories in 1998, providing for $206 billion in payments to the States over a 25 year period as reimbursement for health and other related costs.
Is a tobacco settlement bond good?
Despite new challenges to tobacco companies, tobacco settlement bonds remain good investments. Unlike corporate bonds issued directly by tobacco companies, debt service payments on tobacco settlement bonds do not rely on the credit strengths of any particular tobacco company, but on the tobacco industry as a whole and the smokers who continue ...
What is the tobacco master settlement agreement?
The Tobacco Master Settlement Agreement ( MSA) was entered in November 1998, originally between the four largest United States tobacco companies ( Philip Morris Inc., R. J. Reynolds, Brown & Williamson and Lorillard – the "original participating manufacturers", referred to as the "Majors") and the attorneys general of 46 states. The states settled their Medicaid lawsuits against the tobacco industry for recovery of their tobacco-related health-care costs. In exchange, the companies agreed to curtail or cease certain tobacco marketing practices, as well as to pay, in perpetuity, various annual payments to the states to compensate them for some of the medical costs of caring for persons with smoking-related illnesses. The money also funds a new anti-smoking advocacy group, called the Truth Initiative, that is responsible for such campaigns as Truth and maintains a public archive of documents resulting from the cases.
How many lawsuits were filed against tobacco companies?
By the mid-1950s, individuals in the United States began to sue the companies responsible for manufacturing and marketing cigarettes for damages related to the effects of smoking. In the forty years through 1994, over 800 private claims were brought against tobacco companies in state courts across the country. The individuals asserted claims for negligent manufacture, negligent advertising, fraud, and violation of various state consumer protection statutes. The tobacco companies were successful against these lawsuits. Only two plaintiffs ever prevailed, and both of those decisions were reversed on appeal. As scientific evidence mounted in the 1980s, tobacco companies claimed contributory negligence as they asserted adverse health effects were previously unknown or lacked substantial credibility.
How long does it take for a SPM to join the Master Settlement Agreement?
As an incentive to join the Master Settlement Agreement, the agreement provides that, if an SPM joined within ninety days following the Master Settlement Agreement's "Execution Date," that SPM is exempt ("exempt SPM") from making annual payments to the settling states unless the SPM increases its share of the national cigarette market beyond its 1998 market share, or beyond 125% of that SPM's 1997 market share. If the exempt SPM's market share in a given year increases beyond those relevant historic limits, the MSA requires that the exempt SPM make annual payments to the settling states, similar to those made by the OPMs, but based only upon the SPM's sales representing the exempt SPM's market share increase.
What was the 1997 National Settlement Proposal?
This proposed congressional remedy (1997 National Settlement Proposal (NSP), a.k.a. the "June 20, 1997 Proposal") for the cigarette tobacco problem resembled the eventual Multistate Settlement Agreement (MSA), but with important differences. For example, although the congressional proposal would have earmarked one-third of all funds to combat teenage smoking, no such restrictions appear in the MSA. In addition, the congressional proposal would have mandated Food and Drug Administration oversight and imposed federal advertising restrictions. It also would have granted immunity from state prosecutions; eliminated punitive damages in individual tort suits; and prohibited the use of class actions, or other joinder or aggregation devices without the defendant's consent, assuring that only individual actions could be brought. The congressional proposal called for payments to the states of $368.5 billion over 25 years. By contrast, assuming that the Majors would maintain their market share, the MSA provides baseline payments of about $200 billion over 25 years. This baseline payment is subject to
How many plaintiffs have ever prevailed in the tobacco case?
Only two plaintiffs ever prevailed, and both of those decisions were reversed on appeal. As scientific evidence mounted in the 1980s, tobacco companies claimed contributory negligence as they asserted adverse health effects were previously unknown or lacked substantial credibility.
When was the Master Settlement Agreement signed?
Adoption of the "Master Settlement Agreement". In November 1998 , the Attorneys General of the remaining 46 states, as well as of the District of Columbia, Puerto Rico, and the Virgin Islands, entered into the Master Settlement Agreement with the four largest manufacturers of cigarettes in the United States.
When was smoking linked to heart disease?
Private lawsuits before the settlement. In September 1950, an article was published in the British Medical Journal linking smoking to lung cancer and heart disease. In 1954 the British Doctors Study confirmed the suggestion, based on which the government issued advice that smoking and lung cancer rates were related.
Fact Sheet: Tobacco Settlement Fund
HAP supports the Governor’s budget proposal to keep the Tobacco Settlement Fund whole.
Background
During the 2017–2018 state budget process, the General Assembly allowed for the monetization of future funds received through the 1998 Master Settlement Agreement or the Tobacco Settlement Fund (TSF) to balance the 2017–2018 state budget. The commonwealth was able to leverage future tobacco payments and raise $1.5 billion.
Key Points
Identified as the worst public health crisis in Pennsylvania, the hospital community is at the forefront of attempting to manage the opioid epidemic. Disproportionately affected by the crisis are the Medicaid and uninsured patient population. TSF monies are critical to allow hospitals to continue to combat this issue
Why do states need to use tobacco settlement dollars?
The American Lung Association believes that states must use these tobacco settlement dollars, which are intended to compensate states for the healthcare costs from treating sick smokers and former smokers, and revenue from tobacco taxes to fund robust tobacco prevention programs to help tackle the #1 preventable cause of death in this country, tobacco use. Clearly, we have a tall mountain to climb though.
What was the largest settlement in the history of tobacco?
In 1998, almost every state in the U.S. came together to approve the largest civil settlement in U.S. history, the Tobacco Master Settlement Agreement (MSA). This court settlement between 46 states and the District of Columbia and the major tobacco companies forced them to end some of their more egregious marketing practices and provided for annual payments to the states for some of the medical costs of caring for the 16 million Americans who have smoking-caused illnesses. The settlement was huge: $206 billion over the first 25 years and the payments continue indefinitely into the future.*
How many states have failed the Tobacco Control 2016 test?
That's over 80 percent of states that failed the test!
When was the Master Settlement Agreement reached?
ALERT: The Master Settlement Agreement involves a 1998 settlement reached between the nation's four largest tobacco companies and attorneys general from 46 states and territories. Despite recent reports on the internet, there is no provision for payments to individuals.
Does tobacco cause lung cancer?
And their profits come at our expense: Tobacco use causes or makes worse a whole host of diseases and conditions, including lung cancer and chronic obstructive pulmonary disease (COPD). Tobacco also eventually kills over a third of people who use it. In the 1990s, policymakers finally stood up to the industry and acted.
Overview
History of adoption
In September 1950, an article was published in the British Medical Journal linking smoking to lung cancer and heart disease. In 1954 the British Doctors Study confirmed the suggestion, based on which the government issued advice that smoking and lung cancer rates were related. In 1964 the United States Surgeon General's Report on Smoking and Health likewise began suggesting the relati…
Summary of terms
The Original Participating Manufacturers (OPMs) agreed to several broad categories of conditions:
• to restrict their advertising, sponsorship, lobbying, and litigation activities, particularly as those activities were seen as targeting youth;
• to disband three specific "Tobacco-Related Organizations," and to restrict their creation and participation in trade associations;
Contraband statutes
By the middle of 2000, domestic NPMs and importers had begun to obtain greater market share. The NAAG noted that reductions in settlement payments which result from an overall reduction in cigarette consumption benefit the states because health care costs imposed by each cigarette exceed the settlement payments. On the other hand, when reductions in settlement payments occur because NPM sales displace PM sales, the states receive no benefits if the NPMs do not …
Criticism
Some anti-smoking advocates, such as William Godshall, have criticized the MSA as being too lenient on the major tobacco companies. In a speech at the National Tobacco Control Conference, Godshall stated that "[w]ith unprecedented future legal protection granted by the state A.G.s in exchange for money, it appears that the tobacco industry has emerged from the state lawsuits even more powerful".
Securitization
In the ten years following the settlement, many state and local governments have opted to sell so-called Tobacco Bonds. They are a form of securitization. In many cases the bonds permit state and local governments to transfer the risk of declines in future master settlement agreement payments to bondholders. In some cases, however, the bonds are backed by secondary pledges of state or local revenues, which creates what some see as a perverse incentive to support the tobacco indu…
Individual state settlements
There is technically a distinct MSA signed separately with each state. While these MSAs are identical, the states have had to enact enabling legislation which differs from state to state. Furthermore, each state's court system is entitled to create its own jurisdictional interpretations of the MSA text. As a result, legal understanding of the MSA differ from state to state.
Documents relating to the initial lawsuits filed by each individual state are available at the UCSF
See also
• Operation Berkshire
• Project SCUM
• Tobacco Settlement Financing Corporation
• "Truth" ad campaign