If you are hoping to buy health insurance in 2014, now is the time to stop smoking

Recently I was listening to Rush Limbaugh as I cruised down the highway. He began a rant about smokers being charged an extra $5,000 to

purchase health insurance through the health insurance exchanges beginning in 2014. I said to my wife, as usual he doesn’t know what he is talking about; just riling the troops. However, as is my custom I check out all outrageous claims on both the right and left.

While Limbaugh was simplifying the matter and taking the worst case scenario, the fact is that under Obamacare insurers in the individual market are allowed to charge smokers up to 50% more for their health insurance premium. Premiums will also be adjusted based on age, with older individuals paying more than younger folks.

The estimated average premium through a health insurance exchange for a 50-year-old beginning in 2014 is about $7000 so a 50% smoker additional premium would be $3,500 or $292 per month. That’s a heavy price to pay for a drag on your $8.00 pack of cigarettes. The rationale of course is that smokers pose a higher risk because they are likely to have higher health care costs … and higher health care costs raise the premiums for every person in the insured group.

Charging individuals more based on health risk is nothing new. Employers have been doing this for years. Many employers add a surcharge for employees who smoke, are overweight and fail to participate in wellness programs. However, they are typically far lower charges than 50% of the normal premium.

It remains to be seen how insurers will apply this smoker surcharge. If they apply the full 50%, it may simply price smokers out of the market thereby adding to uncompensated care. There is also a practical side. While there is no doubt that statistically smokers are subject to health risk and higher health care costs, that does not mean that every smoker has high health care expenses or that those expenses may not occur many years in the future for a younger person.

No doubt this provision of PPACA is intended to discourage smoking and it is hard to argue against that, but as usual there are unintended consequences, in this case a population of smokers who can’t afford health insurance. Sure, we can always say if they want insurance just quite smoking … easier said than done for many people, not to mention that the health risk damage may already have been done even if the smoker stops after twenty or thirty years.

Here is more on this issue.

Related articles

• Obamacare Will Cost Aging Smokers Big Bucks (personalliberty.com)
• Health insurance to burn smokers (bankrate.com)
• Smokers face high health care premium (mysanantonio.com)