Tobacco users could face sticker shock when buying coverage in the state-wide health insurance marketplaces that opened for enrollment on October 1, thanks to a controversial clause in the Affordable Care Act (ACA). The law seeks to discourage smoking, the nation’s largest preventable health hazard – which kills some 443,000 Americans a year at a cost of $193 billion in medical care and lost productivity,
To reach this goal without discriminating against smokers, the ACA will allow insurers to continue charging tobacco users a so-called “smoker surcharge” limited to 50% above what they charge nonsmokers, as of January 1, 2014.
However, combining this surcharge with another health reform rule that prohibits low-income applicants from using federal tax subsidies to help offset it could price some lower-income smokers out of the market. According to the Kaiser Family Foundation, a 50-year-old male smoker earning $15,000 a year would pay $8,100 a year for Health coverage, including a $2,700 tobacco-use surcharge. The federal low-income subsidy would reduce his premium to about $3,000. But if he didn’t smoke, his premium would be just $300.
According to the Center for Medicare and Medicaid Services before the ACA, health insurance companies could impose a surcharge far higher than 50% on smokers – or refuse to cover them. Tobacco users can avoid the 50% surcharge if they live in states that set lower limits on surcharges or prohibit them – or by enrolling in a stop-smoking program.
Says Rick Curtis, president of the Institute for Health Policy Solutions; ”Long story short, smokers usually won’t pay more for insurance compared to current or previous years. Most of them will have better access and more affordable premiums under the ACA restrictions.”