Obamacare Costs Incentivized Smokers to Forego Coverage, Smoke More

Middle-aged smokers paid $70 more for coverage on average

• August 10, 2016 3:20 pm


The Affordable Care Act allowed health insurance plans to charge smokers up to 50 percent more in premiums, which incentivized smokers to forego coverage and smoke more, according to a study from Health Affairs.

Obamacare included provisions that were supposed to incentivize smokers to quit, requiring health insurance plans to screen for tobacco use and cessation treatment with no cost sharing. Plans were also allowed to charge smokers up to 50 percent more in premiums than non-smokers.

The report found that charging smokers more for health insurance did not increase the number of smokers who quit or drive down health care costs, which was the primary stated aim of Obamacare.

In fact, Obamacare may have led some smokers to forego insurance altogether, especially since the IRS tax penalty for not having insurance can be waived for individuals who cannot afford premiums. Researchers found that in more than 30 percent of states, plan options were unaffordable to a 45-year-old smoker with low to medium income.

For example, a 49-year-old smoker living in one of the 43 states that increased premiums for smokers paid an average of $70 per month for a tobacco surcharge in 2014.

The report found that the more expensive the tobacco surcharge, the more health care coverage declined for smokers.

"We found that medium and high tobacco surcharges dampened the increases in the smokers’ insurance coverage during the first year of the exchanges’ implementation," the report states. "Smokers facing the highest surcharges exhibited a 12-percentage-point reduction in coverage relative to the group with no surcharge."

The report also studied whether tobacco surcharges had an effect on smoking cessation. Smokers with low surcharges, classified as 10 percent or less of premiums, were 5.6 percentage points less likely to quit smoking than those with no surcharge at all.

Additionally, the report said it is possible surcharges can even cause some smokers to smoke more.

"Putting a price on bad behaviors can alleviate the guilt of engaging in them, which has an unexpected effect: the behaviors increase," the report says. "Low surcharges might dampen smoking cessation if some smokers feel that the surcharge compensates society for their behavior, and if the fine is not high enough to incentivize quitting."

"Taken together, these findings suggest that tobacco surcharges conflicted with a major goal of the ACA – increased financial protection – without increasing smoking cessation," the report states.

"The Affordable Care Act includes smoking cessation items and services, including medication, as a free preventive service for Marketplace, many employer and other individual health plans," said Marjorie Connolly, the press secretary of the Department of Health and Human Services. "And, because of the Affordable Care Act, you can no longer be denied coverage for being a smoker."

"These are important steps forward for the health of our country, as is the fact that 20 million people have gained health insurance because of the law," Connolly said.

Published under: Obamacare