Sarah Kliff has two very interesting articles at The Washington Post this week about the Affordable Care Act and tobacco. In the first, she looks at how the law prohibits or limits insurance companies charging higher prices to higher risk clients, with one key exception: They can charge smokers up to 50% more. Interestingly, anti-cancer groups and tobacco companies have teamed up to oppose this provision, though obviously for different reasons.
Her follow-up post examines the under-the-radar question of how the government should define “tobacco user” for health insurance purposes:
[…] the law says nothing more about what counts as “tobacco use.” And that’s a hard factor to regulate: Unlike age, where subscribers have one definite birth date, the idea of who counts and doesn’t count as a tobacco user is really fuzzy. Enter the regulators!
The impact on the cost of insurance for smokers could be huge, especially for those with lower incomes:
For a low-income American faced with the surcharge, their premium could jump from $708 to $3,308. That jump is larger than 50 percent due to the fact that the base premium gets a federal subsidy, while the tobacco surcharge does not.
Regardless of whether this is good policy, it’s clear that frequent smokers of cigarettes should count as tobacco users. But what about people who only smoke an occasional cigarette socially? Or enjoy an infrequent cigar? Or people who use other forms of tobacco entirely? These users have very different risk profiles, but the law could treat them equally. This would put them in the difficult position of either paying exorbitantly for health insurance or lying about their status, the latter option putting them at risk for losing coverage.
Health and Human Services has invited comment on what questions should be asked of insurance applicants to determine whether they count as tobacco users. Kliff mentions a few suggestions, all of which inquire about use within a given period of time:
The Campaign for Tobacco Free Kids argues that it should be defined as smoking within a set amount of time.
“The Department will need to determine a period that is not so short as to allow allow a person to identify himself or herself as not a tobacco user if he or she ‘quit’ the day they applied for health insurance but not so long as to include people who have actually quit,” the group writes in public comment.
America’s Health Insurance Plans, which represents most health insurance companies, proposes a two-part question: “Have you used tobacco in the last twelve months?” and “Are you currently using tobacco products?”
These suggestions simply reframe the question, grouping people into smokers or non-smokers/quitters. They don’t address casual use. A casual cigar smoker would have to answer yes to both questions posed by America’s Health Insurance Plans. Twelve months is a long time! Should someone who enjoys an occasional cigar have to pay 50% (or more) higher on their insurance premiums, the same penalty faced by pack-a-day smokers?
A sensible definition would address not only recency of tobacco use, but also frequency within that time period (and possibly the form of tobacco used). Unfortunately, this consideration doesn’t appear to be part of the current discussion. That oversight, along with the looming threat of FDA regulation and calls for higher tobacco taxes, is one more item that could make this a tough year for the cigar industry.
Related: Here’s my article from The Atlantic a couple months ago arguing for a different approach to tobacco regulation. And at Quora, I reference some of the research comparing the risks of cigars and cigarettes.