Since Jan. 1, insurance companies cannot deny coverage or charge higher premiums for pre-existing conditions, including diabetes, cancer and heart disease.
The one exception is tobacco use.
Insurance companies are permitted to impose a surcharge on consumers who smoke. This “penalty” under the law can be as high as 50 percent of the premium.
It is one of the ironies of the Affordable Care Act that insurers can charge more if you smoke but not if you have lung cancer. Of course there are good (and competing) policy reasons for this odd outcome. The ACA seeks to provide universal coverage to all. People with cancer have no immediate control or choice over their condition. If you or someone in your family has lung cancer you understand this policy on a gut level. If you smoke or chew you do have immediate control and choice over your habit and the higher price is intended to encourage you to quit. Competing policies have to strike a balance between making insurance accessible to all, encouraging healthy behavior and fairly distributing the health cost of tobacco use.
This balance is difficult and far from perfect in practice. We know that financial incentives can result in less tobacco use. Recently, Georgia’s public employees faced an $80 a month surcharge on their health insurance if they smoked. This resulted in a three-fold increase in quitting tobacco. But these employees already had insurance. The Centers for Disease Control (CDC) lists increasing insurance coverage as one of the most effective means of reducing tobacco use. Nicotine replacement products such as bupropion and Chantix, are effective. They are also more likely to be used by the insured. Applying the financial incentive prior to obtaining insurance coverage is as likely to amount to a barrier to coverage as it is a reason to quit. It is a further irony that Marketplace policies have very good coverage for preventive care. Once covered, a smoker can get an office visit for prevention free of charge and the prescription also will be covered. But they need the coverage first. It is another case of “ready-fire-aim.”
So what will tobacco use cost a person getting coverage in the insurance Marketplace? In Allen County, a 40-year-old can get a “Silver” (70/30) policy on the Marketplace for between $221 and $261 a month before government subsidies are figured in. The surcharge for smokers could be $110 to $130 a month. In actual practice, insurance companies serving Allen County, Blue Cross of Kansas and Coventry, seem to charge significantly less. As long as they stay under the limit there is little transparency in how the surcharge is applied. Working as a volunteer Navigator, it is my experience that this surcharge is usually in the 15-20 percent range and may vary policy to policy or possibly with the consumer’s age. The surcharge is especially bad news for low-income consumers because there is no subsidy on the tobacco surcharge. A low-income consumer in the Marketplace might wind up paying more for the tobacco surcharge than for the unsubsidized portion of the premium.
For help with the ACA visit the Thrive Allen County office from 9 to 5, as well as Wednesdays from 5 to 8 p.m. Call 365-8128 for more information.
— John Robertson
Smokers face higher insurance premiums under Obamacare
