Affordable Care Act: Smoking Surcharges Impose Challenges

By Ashley Thomas, Vanderbilt Law School-

One of the significant features of the Patient Protection and Affordable Care Act (ACA) is the ability of insurance companies to charge smokers up to 50% more than non-smokers. Smoking contributes significantly to a number of health problems amongst individuals ranging from heart disease to cancer. The reasoning behind the surcharge is they should pay more for coverage. This surcharge is supposed to incentivize individuals to quit smoking. Cigarette smoking is the leading cause of preventable death in the United States accounting for 1 of every 5 deaths in the United States annually. While the goal is to deter tobacco usage, this premium surcharge could make health insurance unaffordable to cigarette smokers, many of whom have low-incomes. According to the Centers for Disease Control and Prevention, an estimated 45.3 million people or 19.3% of all adults in the United States smoke cigarettes. Reports suggest that not only will smokers be faced with higher premium charges but federal subsidies will not be applied to the smoker’s premiums. For example, an individual who has an insurance plan that costs $6,000 may qualify for a federal health subsidy of $3,000. That individual would have to pay $3,000 out of pocket to cover the difference. However, if this individual admits to smoking four times a week in the last six months, then the tobacco surcharge will spike the price back to $6,000 for out of pocket expenses.

Insurance companies will define tobacco use as someone who uses a tobacco product four or more times a week within the past six months. But the question remains how will the government enforce the smoking surcharge? Will the Department of Health and Human Services take people at their word that they quit smoking? The Department of Health and Human Services will rely on the honor system for people reporting their smoking history. This runs contradictory to the life insurance marketplace, which has consumers undergo urine and saliva tests to check for nicotine. But will the threat of surcharges increasing premiums by 50% encourage people to lie about their smoking habits? It is human nature to underestimate personal bad habits to other people. The only real way health insurers will have of determining whether or not a person has ceased to smoke is that patient’s attestations to such behavior. Families of smokers will also be affected if these individuals remain uninsured. It has been widely publicized that lack of insurance puts fiscal and emotional stress on patients and their families. The burdensome surcharge will add to this fiscal stress many families endure regarding their healthcare status.

Organizations have spoken out in opposition to the smoking surcharges including, surprisingly, the American Cancer Society and the American Lung Association. Few organizations are as devoted to the cessation as the American Lung Association and the American Cancer Society. Yet these organizations believe that there might be alternatives to imposing surcharges on smokers such as increasing tobacco taxes and smoke free laws.

Also, what if smoking is an addiction, not a choice, that individuals endure? According to the American Cancer Society, addiction is defined as mental or emotional dependence on a substance. Around 70% of smokers want to quit each year and around half attempt to quit but only 4-7% actually without help. Shouldn’t smoking be considered a pre-existing condition such as Type 2 Diabetes? But why are insurers allowed to charge more to smokers but not other people who engage in unhealthy behavior such as alcoholism, eating to excess, etc? Alcohol consumption is as much a volitional action as is smoking. The deleterious health impact of excessive alcohol consumption is well known. Will an insurance company in the future be able to make their subscribers attest to the fact that they drink no more than two alcoholic beverages a day?

Many states, such as California, Massachusetts, Rhode Island, Connecticut, New Jersey, New York, Vermont and Washington D.C, have tried to prohibit insurers from applying a tobacco surcharge. While other states including Arkansas, Colorado and Kentucky, allow companies to charge tobacco users less than 50% the Affordable Care Act proscribes. A good healthcare system should aspire to decrease medically irresponsible behavior in the population. It will be important to see how smoking surcharge is implemented and if it truly poses as a barrier to health care coverage.

Ashley Thomas resides in Nashville, Tennessee, and is a student at the Vanderbilt School of Law, expected to graduate in May of 2014. Ashley is a Student Member of the American Health Lawyers Associations and a volunteer at the Vanderbilt Medical-Legal Partnership. Ashley graduated from Northwestern University with a B.A. in political science in 2009.