Giving Smokers a Pass on Health Premiums

July 19, 2013
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smoker health premiumsThe Affordable Care Act lets the new health insurance exchanges charge smokers 50% higher premiums. The policy is justified by the fact that smokers are less healthy and tend to spend more on health care costs, and as an incentive to quit.

smoker health premiumsThe Affordable Care Act lets the new health insurance exchanges charge smokers 50% higher premiums. The policy is justified by the fact that smokers are less healthy and tend to spend more on health care costs, and as an incentive to quit.

I’m sympathetic to this logic, but I also understand why a few states have decided to forego the punitive pricing. Smoking is incredibly addictive; most smokers want to quit but have trouble doing so. A lot of those smokers also have lower incomes and some are mentally ill. Having higher premiums might be fair in one sense –in that it compensates non-smokers for the higher health care costs of smokers– but it’s also unfair in that it punishes the vulnerable.

From a practical standpoint punishing smokers is also likely to drive them away from the insurance marketplace, which will limit the effectiveness of the Affordable Care Act, the main point of which is to bring more people into coverage.

In any case most exchanges will charge smokers more, so it will be a good opportunity to study the impact of this policy. For now I would place my bet on the effectiveness of charging little or no differential for smokers.

(Smokers and health insurance / shutterstock)