A little-known provision in the Health Care Reform law passed in 2010 is that it can penalize smokers — by a LOT.
Beginning in January 2014, for a 60-year-old smoker, the surcharge could be up to $6,000 a year. That surcharge gets bigger and bigger for older smokers. Ouch. Boy, that’s incentive to quit, especially tacking on the other $2,000 a one-pack-a-day smoker spends just on the cigarettes. Especially considering that the majority of smokers now are low-income.
Now the plan does allow smokers to avoid the surcharge if they agree to join a smoking cessation program; however, that option is not necessarily guaranteed to people attempting to buy individual insurance, according to this article quoted here.
Is this fair? $6,000 is a lot of money. I’m sure it drives the smokers nuts that the law specifically says surcharges for people being overweight are not allowed. I can tell you many insurance companies already charge higher premiums to smokers (ours does, in fact), for a very simple reason. Smokers cost them more money. They get more diseases at a younger age than nonsmokers and cost more to insure and end up raising everyone’s rates as a result.
Here’s a quote from this article about it:
Here’s how the math would work:
Take a hypothetical 60-year-old smoker making $35,000 a year. Estimated premiums for coverage in the new private health insurance markets under Obama’s law would total $10,172. That person would be eligible for a tax credit that brings the cost down to $3,325.
But the smoking penalty could add $5,086 to the cost. And since federal tax credits can’t be used to offset the penalty, the smoker’s total cost for health insurance would be $8,411, or 24 percent of income. That’s considered unaffordable under the federal law. The numbers were estimated using the online Kaiser Health Reform Subsidy Calculator.
Like I said, it seems as if a balance could be found. Put more emphasis on smoking cessation programs, make sure they are available to everyone.