Health insurance premium surcharge on smokers makes strange bedfellows

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For all the political division over the nation's health care law, one provision has managed to put two longtime rivals on the same side.

Big tobacco companies and anti-cancer activists are standing in opposition to a part of the Affordable Care Act that allows insurance companies to charge smokers 50 percent more than patients who do not use tobacco.

Cigarette makers such as Altria say the policy amounts to discrimination against smokers.

The American Cancer Society, meanwhile, worries that the high surcharges could make health insurance unaffordable to cigarette smokers, who are disproportionately low-income.

"We're anti-smoking, not anti-smoker," said David Woodmansee, the cancer society's associate director for state and local campaigns.

Unlike other groups that have failed to get a divided Congress to kill parts of President Barack Obama's signature legislative accomplishment, these unusual partners could have a shot at success: They can take the battle to individual states, which have the authority to bar health insurers from considering tobacco use in setting subscriber premiums.

Health insurance plans have typically set premiums higher for patients who they expect to have higher health costs. They tend to charge women more, for example, because pregnancies can be costly. Older patients, too, usually face higher premiums, because they use the health care system more.

Starting in 2014, the Affordable Care Act will curtail this practice. Health insurance plans are barred from charging women higher premiums than men. They can charge older patients only three times as much as the youngest members. Smokers, meanwhile, could face a 50 percent surcharge on their premiums.

Although low- and middle-income tobacco users will get premium subsidies meant to make health insurance more affordable, that government assistance would not apply to the tobacco surcharge, leaving the smoker to foot the bill.

One analysis, prepared by the nonpartisan Institute for Health Policy Solutions, estimated that the tobacco surcharge could cause a low-income person's annual premiums to jump from $708 to $3,308.

"Our concern is that a tobacco use surcharge carries a risk of rendering health insurance unaffordable for many people," Campaign for Tobacco-Free Kids president Matthew Myers said.

Health insurance companies tend to support the provision, which they argue allows them to adequately charge tobacco users for the additional health care costs they incur.

"If issuers are not allowed to adjust rates for tobacco use for these individuals, they will have to increase standard rates for all individuals," the Blue Cross Blue Shield Association wrote in comments to the Department of Health and Human Services last month.

The American Cancer Society opposed the tobacco rating provision during the congressional debate about the health care law. It is now looking at a state-by-state approach to work on rolling back the provision.

Members of the group's policy team are working on a template for testimony they could provide at the legislative hearings that they expect to occur.

"It is the law of the land, but we will be supportive of states that try to restrict the surtax," policy director Steve Finan said. "We are engaging on the state level."

nation - health


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