Do you belong to the species Americanus Tobacconus, a.k.a. the American smoker? Once prevalent across the country, your herds have thinned from decades of social pressure, while your habitat has been reduced to your own home, some grim public smoking areas, and Native American casinos.
As if that were not bad enough, ObamaCare and the insurance companies intend to finish you off completely. Actually, they wish to convert you to the species Americanus Smokefreeus, because you will cost them less money if you evolve.
How can insurers charge more for smokers under ObamaCare? While health insurers are no longer able to differentiate among those with pre-existing conditions, smoking is not considered a pre-existing condition according to the Affordable Care Act (ACA). Smoking is one of the two exceptions where insurance companies are allowed to charge more (the other is age, which is pre-existing by definition).
The ACA (otherwise known as ObamaCare) contains strong incentives to stop smoking from both the incentive and penalty side – although so far the sticks are bigger than the carrots.
Insurance companies can charge up to a 50% surcharge for smoking, and the surcharges are applied after subsidies. Thus if you are a lower-income smoker – as statistically, you more are likely to be – the actual amount you pay can increase well beyond 50%. According to ObamaCareFacts.com, the surcharge can reach up to three times the non-smoking rate.
States vary in the application of the smoker’s premium. Some of the most populous states, such as California and New York, ban it altogether, and others cap the surcharge at a lesser percentage. Insurers may also opt to charge less, fearing they will price themselves out of the market – although since smokers require more medical service, arguably, insurers are doing themselves a favor if their pricing makes smokers disproportionately choose another carrier.
However, the surcharge has been delayed for technical problems. The so-called “smoker’s glitch” in the computers at the Department of Health and Human Services (HHS) has delayed full implementation of the smoking surcharge until 2015, assuming the glitch is fixed by then.
Recall the two categories of older age and smoking? If you fell into both categories, the combined surcharge could be up to 4.5 times – but HHS computers would not allow any charge larger than 3 times the cheapest beneficiary charge. Thus for the past year, the increased burden was spread among all taxpayers.
How is a smoker defined? By the ACA, surcharges apply to those who smoked (or consumed other tobacco products) at least an average of four times a week within the last six-month period. Insurance companies or state regulators can use narrower definitions if they wish.
We have covered the sticks in detail, but what about the carrots? The ACA required coverage of services recommended by the Preventative Services Task Force, including smoking cessation programs, but did not provide much in the way of guidance or boundaries. Smoking cessation programs were clarified earlier this year because of inconsistent implementation.
Now, group health plans are required to provide free screening for tobacco use and allow for at least two annual cessation attempts, with combinations of counseling sessions, and potentially, medication.
It is difficult to evolve from Americanus Tobacconus into Americanus Smokefreeus, but it is doable. If the ObamaCare penalties and incentives do not convince you, do it for those who care about you. For further motivation, use the thought of depriving insurance companies – and tobacco companies -- of more of your money.