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Background: Previous research has shown that tobacco control funding in California has reduced per capita cigarette consumption and per capita healthcare expenditures. This paper refines our earlier model by estimating the effect of California tobacco control funding on current smoking prevalence and cigarette consumption per smoker and the effect of prevalence and consumption on per capita healthcare expenditures. The results are used to calculate new estimates of the effect of the California Tobacco Program. Methodology/Principal Findings: Using state-specific aggregate data, current smoking prevalence and cigarette consumption per smoker are modeled as functions of cumulative California and control states' per capita tobacco control funding, cigarette price, and per capita income. Per capita healthcare expenditures are modeled as a function of prevalence of current smoking, cigarette consumption per smoker, and per capita income. One additional dollar of cumulative per capita tobacco control funding is associated with reduction in current smoking prevalence of 0.0497 (SE.00347) percentage points and current smoker cigarette consumption of 1.39 (SE.132) packs per smoker per year. Reductions of one percentage point in current smoking prevalence and one pack smoked per smoker are associated with $35.4 (SE $9.85) and $3.14 (SE.786) reductions in per capita healthcare expenditure, respectively (2010 dollars), using the National Income and Product Accounts (NIPA) measure of healthcare spending. Conclusions/Significance: Between FY 1989 and 2008 the California Tobacco Program cost $2.4 billion and led to cumulative NIPA healthcare expenditure savings of $134 (SE $30.5) billion. [ABSTRACT FROM AUTHOR]