Obamacare allows steep surcharge for smokers
WASHINGTON — Millions of smokers could be priced out of health insurance because of tobacco penalties in President Obama's health-care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.
The Affordable Care Act — “Obamacare” to its detractors — allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting Jan. 1, 2014.
For a 55-year-old smoker, the penalty could reach nearly $4,250 annually. A 60-year-old could wind up paying nearly $5,100 on top of premiums.
Younger smokers could be charged lower penalties under rules proposed in the fall by the Obama administration. Older smokers, though, could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.
Workers covered on the job would be able to avoid tobacco penalties by joining smoking-cessation programs because employers' plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually.
Nearly one of every five adults smokes. The ratio is higher among lower-income people, who also are more likely to work in jobs that don't come with health insurance; therefore, they will depend on the new federal health-care law. Smoking increases the risk of developing heart disease, lung problems and cancer, contributing to nearly 450,000 deaths a year.
Insurers won't be allowed to charge more under the overhaul for people who are overweight or have a health condition, such as a bad back or a heart that skips beats. Employers, though, can charge more if a person smokes.
Starting next Jan. 1, the federal health-care law will make it possible for people who can't get coverage now to buy private policies, providing tax credits to keep the premiums affordable. Although the law prohibits insurance companies from turning away the sick, the penalties for smokers could have the same effect in many cases — keeping out potentially costly patients.
“We don't want to create barriers for people to get health-care coverage,” said California state Assemblyman Richard Pan, who is working on a law in his state that would limit insurers' ability to charge smokers more. The federal law allows states to limit or change the smoking penalty.
“We want people who are smoking to get smoking-cessation treatment,” said Pan, a pediatrician who represents the Sacramento area.
Obama administration officials declined to be interviewed for this article, but a former consumer-protection regulator for the government is raising questions.
“If you are an insurer and there is a group of smokers you don't want in your pool, the ones you really don't want are the ones who have been smoking for 20 or 30 years,” said Karen Pollitz, an expert on individual health-insurance markets with the nonpartisan Kaiser Family Foundation. “You would have the flexibility to discourage them.”
Several provisions in the federal health-care law work together to leave older smokers with a bleak set of financial options, said Pollitz, formerly deputy director of the Office of Consumer Support in the federal Health and Human Services Department.
First, the law allows insurers to charge older adults up to three times as much as their youngest customers.
Second, the law allows insurers to levy the full 50 percent penalty on older smokers while charging less to younger ones.
Third, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.
“The effect of the smoking (penalty) allowed under the law would be that lower-income smokers could not afford health insurance,” said Richard Curtis, president of the Institute for Health Policy Solutions, a nonpartisan research group that called attention to the issue with a study about the potential impact in California.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- National park entry fees on rise as summer nears
- American crash victims: U.S. government contractor, daughter
- Missing Calif. woman found safe at dad’s apartment
- Bergdahl, speaking for 1st time, claims 12 attempts to flee Taliban
- Federal agents charged with plundering online drug bazaar Silk Road
- Indiana governor wants changes to religious-objection law