New Study Says Quitting Smoking Could Save California Billions of Dollars

Governor Schwarzenegger Urged to Sign SB 220 (Yee) - Most Comprehensive Smoking Cessation Legislation in Country

Sacramento, CA (September 14, 2010)

A new study released today by the American Lung Association, and conducted by researchers at Penn State University, finds that helping smokers quit not only saves lives but also offers favorable economic benefits to California and the nation.  The study, titled Smoking Cessation: the Economic Benefits, provides a nationwide cost-benefit analysis that compares the costs to society of smoking with the economic benefits of states providing cessation (quit-smoking) coverage. 

The study comes at an important time, as smoking cessation provisions are being implemented at the federal level and in California as Senate Bill 220 (Leland Yee, D-San Francisco) is awaiting action by Governor Arnold Schwarzenegger.  Sponsored by the American Lung Association in California, the Cancer Society and the Heart Association, SB 220 would require all health plans and insurers to provide coverage of treatments to help people who smoke to quit smoking.  If signed into law, SB 220 would represent the most comprehensive smoking cessation benefits policy in the nation.

“This study clearly shows that not only are the lives of California’s men, women and children being stolen by smoking, but also the state’s dollars and cents,” said Jane Warner, President and CEO of the American Lung Association in California. “Governor Schwarzenegger has the opportunity to make a long-lasting difference in the health and lives of future generations of Californians and we urge him to do so by signing SB 220 into law.”

This new study identifies the significant and staggering costs directly attributable to death and disease caused by smoking.  The study finds that smoking results in costs to the California economy of more than $26 billion. This includes workplace productivity losses of nearly $6 billion, costs of premature death at more than $9 billion, and direct medical expenditures of $11 billion. There are an estimated 3.8 million people who smoke in California.  Each year, tobacco use kills more than 38,000 people in the state, representing the single most preventable cause of premature death in California.

The Penn State study also calculates the combined medical and premature death costs and workplace productivity losses per pack of cigarettes.  The study shows that while the statewide average retail pack of cigarettes in California is $5.17, the true cost of a pack of cigarettes when considering health care impacts and workplace productivity losses is $27.07 per pack, fifty percent more than the $18.05 national average.

The American Lung Association study also found that smoking cessation provided a tremendous return on investment for states.  For every dollar spent on helping smokers quit, states will see, on average, a return of $1.26. However, the return on investment for California is among the highest in the country at $1.40 – a 40 percent positive return. Comparative date for all states can be found at

The study derives these economic benefits by considering lower medical costs due to fewer people smoking, increased productivity in the workplace and reduced absenteeism and premature death due to smoking.

Smoking is the number one preventable cause of illness and death in California and the United States and surveys show that 70 percent of tobacco users want to quit.  Quitting can often take several attempts before a smoker is successful.  Using evidence-based treatments increases smokers’ chances of quitting – but many smokers don’t have access to or don’t know about what kind of treatments are available to them.

Some of the highest rates of smoking are found among people enrolled in Medicaid, the joint federal and state health program for low-income people.  The American Lung Association urges California and every state in the nation to provide all Medicaid recipients and state employees with comprehensive, easily accessible tobacco cessation benefits. A comprehensive cessation benefit includes all seven medications and three types of counseling recommended by the U.S. Public Health Service for tobacco cessation. Only six states now provide comprehensive coverage for Medicaid recipients: Indiana, Massachusetts, Minnesota, Nevada, Oregon and Pennsylvania.

The American Lung Association also recommends that private insurance plans and employers offer comprehensive cessation coverage and encourages states to require them to cover these treatments. Only seven states have such requirements now: Colorado, Maryland, New Jersey, New Mexico, North Dakota, Oregon and Rhode Island.

About the Study

Researchers at Penn State University with expertise in health economics and administration performed this cost-benefit analysis using government and other published data.  The analysis compares the costs of providing smoking cessation treatments (including price of medications and counseling and lost tax revenue) to the savings possible if smokers quit (including savings in health care expenditures, premature death costs, and productivity losses).

Funding for the study was provided through an unrestricted research grant from Pfizer Inc.

About the American Lung Association

Now in its second century, the American Lung Association is the leading organization working to save lives by improving lung health and preventing lung disease. With your generous support, the American Lung Association is “Fighting for Air” through research, education and advocacy. For more information about the American Lung Association or to support the work it does, call 1-800-LUNG-USA (1-800-586-4872) or visit