Tobacco Medicaid Recovery Act of 1996

Tobacco Medicaid Recovery Act of 1996 - Amends title XIX (Medicaid) of the Social Security Act to reward States that recover by lawsuit from manufacturers of tobacco products Federal and State health care costs incurred under Medicaid for the treatment of individuals with diseases attributable to the use of tobacco products. Provides for: (1) attributing a portion of such recovered costs to the non-Federal share of expenditures under the Medicaid programs of such States; and (2) paying another portion to the National Institutes of Health for disease research.