It is understandable that Minnesota politicians are looking to address an opioid crisis that has hit the state hard. But using the opioid crisis as just another excuse to raise taxes is only going to result in more pain for patients in need, and taxpayers.
Yet, that is exactly what politicians in the Minnesota state legislature are pushing, approving different versions of a $20 million tax on opioids.
Everyone knows that this “opioid tax” will ultimately be paid by Minnesotans. In fact, the costs must be passed onto consumers. Federal courts declared New York’s pioneering opioid tax from last year unconstitutional – throwing out language that stated companies could not pass costs on to consumers.
Politicians cannot pretend they don’t know their constituents – not the industry – will be hit with the bill for their tax on pain.
People who are legitimately using medication under a doctor’s supervision would be punished.
It will drive up insurance costs for Minnesotans. Multiple studies have shown that opioid taxes will drive up insurance premiums for everyone, including studies by two Union College economists, and economist Alex Brill for Women In Government.
Brill writes, “The tax would do little to discourage inappropriate use, could have the unintended consequence of promoting illicit opioids for some, and would raise the cost of health care generally.”
Medicine would become less affordable. Hospitals would see higher costs as they purchase drugs. Taxpayers would too, as they pay more for public hospitals and state Medical Assistance.
People without insurance coverage would feel these costs the most, and be incentivized to purchase more dangerous drugs on the black market.
That is why an opioid tax is so morally reprehensible. It would drive more people into the arms of illicit fentanyl, where the greatest danger lies.
Deaths from black market fentanyl, largely from China, and Mexican cartels rocketed to over 26,000 in 2017, according to Bloomberg News. It is illicit fentanyl that is the greatest risk from the opioid crisis, as new CDC data show.
Minnesota politicians have pushed the state to the precipice of adopting this catastrophic tax.
The House bill passed first, and it is the worst version. It includes arbitrary “fees”: $12 million from manufacturers and $8 million from distributors of opioid medication operating in the state.
In addition to the damage of a tax, their arbitrary revenue demand risks creating supply issues. Once one company decides it is not worth operating in Minnesota, there is a risk of a domino effect: one fee-paying company leaves, the remaining operators pay more and have more reason to leave, and so on.
The Senate-approved bill at least moves away from arbitrary fees – instead drastically raising fees on companies that distribute opioid-derived medication in the state. Making matters worse, Gov. Tim Walz has now inserted himself into the legislative sausage-making.
Walz wants to keep the radically increased fees in the Senate bill – even if the state reaches a settlement with pharmaceutical companies in an ongoing lawsuit. If Walz gets his way, they would only be reduced if opioid-related deaths go down.
This makes no sense on its face. It amounts to punishing companies for the results of government-designed policy they have no control over. A policy that not only is unlikely to produce these results, but could actually make the situation worse if more people turn to fentanyl.
There is still time for Minnesotans to speak out. Any politician who wants more affordable health care should oppose this tax.
Minnesota has already seen community-based solutions help those suffering from addiction. One example is Little Falls, which focused on addiction treatment for users, instead of just jail time. According to PBS, the Minnesota Health Commissioner reported the local hospital “has seen patient pill use decrease by 724,000 pills per year and have tapered about 670 patients off of controlled substance prescriptions.”
When the state has a $1 billion-plus surplus, and there are better, proven strategies to address the opioid crisis, Minnesotans should be outraged their legislature is on the verge of approving a misguided tax on pain medication.