Aug. 27, 2013 — The Affordable Care Act has ended some age-old health insurance practices such as denying people with pre-existing conditions. But it does allow insurance companies to charge people who use tobacco 50% more for their premiums.
Supporters say the higher premiums make sense because smokers and other tobacco users have higher health care costs. Critics say the higher rate is more likely to make people lie about their tobacco use or go without coverage than it is to encourage them to quit their habit. Smokers without insurance also put their partners and children at risk.
Here’s what smokers and others need to know.
What does the Affordable Care Act allow insurers to charge tobacco users?
Companies can charge tobacco users up to 50% more. States, though, can mandate a lower percentage or no surcharge.
What is ”tobacco use,” and how is a smoker or tobacco user defined?
Tobacco use is the use of any tobacco product, including cigarettes, cigars, chewing tobacco, snuff, and pipe tobacco, four or more times a week within the past 6 months. (Religious or ceremonial use of tobacco is allowed, such as by Alaska natives or Native Americans). It’s an honor system.
Will every state charge the maximum?
Seven states and Washington, D.C., will not charge smokers higher insurance premiums. The states are: California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island, and Vermont.
Connecticut voted against the higher premiums only for the small group Marketplace, not the individual Marketplace. The other states outlawed higher premiums for both individuals and small business policies.
Three states — Arkansas, Colorado, and Kentucky — will allow companies to charge tobacco users less than 50%.
The remaining states are expected to allow the full 50% additional charge.
The highest possible premiums, though, won’t be effective for the first year because of a limitation in the software systems. That is being fixed.
Tobacco users in a small business plan don’t have to pay the higher premium if they enroll in a quit-smoking program; tobacco users in an individual plan may get a break on the premium if they enroll in a program. The law, however, does not require companies to offer the break in the individual Marketplace.
Will the Affordable Care Act require coverage of quit-smoking programs?
The law requires all new private health insurance plans and Marketplace plans to cover services recommended by the U.S. Preventive Services Task Force, with no cost-sharing fees. That includes tobacco cessation treatments.
What will quit-smoking treatments or programs include?
That is unclear.
Insurance companies don’t have a consistent approach to quit-smoking programs, says Erika Sward, a spokeswoman for the American Lung Association. “What we have seen is a patchwork quilt.”
While the Affordable Care Act requires that new plans cover services recommended by the task force, the task force does not give specifics. It recommends that doctors ask adults about tobacco use, provide cessation programs, and provide counseling for women who smoke during pregnancy.
But there are no ”typical” tobacco cessation programs, according to a survey conducted by Georgetown University researchers.
What’s needed, Sward says, is a comprehensive approach. According to the American Lung Association, tobacco cessation benefits should include the choices recommended by the Public Health Service. These include:
- Nicotine — from a patch, gum, lozenge, nasal spray, or inhaler
- Medications — bupropion (Zyban) and varenicline (Chantix)
- Counseling — individual, group, and phone
In one area, the law is specific: It requires that pregnant women on Medicaid be offered the treatments recommended by the U.S. Public Health Service. Those include asking about tobacco use and offering counseling, with no recommendation about medication use in pregnancy.
Who supports higher premiums for tobacco users?
The insurance industry supports higher rates because smokers have much higher health care costs than nonsmokers, according to Susan Pisano, a spokeswoman for America’s Health Insurance Plans, a trade industry group.
“There is clear documentation of so much greater health care costs [for tobacco users], and we think that should be reflected in the rates,” she says.
In 2004, smoking cost the U.S. $97 billion in lost productivity and $96 billion in direct health care costs, or $4,260 per adult smoker, according to the CDC.
More than half of Americans favor charging smokers more for insurance, according to a Gallup poll released in mid-August.
Who is against higher premiums for tobacco users?
Many health organizations, including the American Lung Association and the American Cancer Society, are against higher rates for smokers and other tobacco users.
The higher premium, besides being discriminatory, may backfire, Sward says.
“We really urge the carrot over the stick approach,” she says. “We know smokers want to quit and they need help to do so. It’s in everyone’s best interest that smokers have access to a good cessation program.”