2013-08-19 16:37:32 - WASHINGTON, D.C. (August 19, 2013): The 50% surcharge on smokers for health insurance under Obamacare is already having an amazing impact, with companies reportedly finding that implementing the surcharge usually halves the smoking rate among their employees, and a Gallop survey showing that a majority already support charging higher health insurance rates for smokers, but not for the obese.
Since each smoking worker can cost his employer over $12,000 more each year, and smoking costs the American economy some $300 billion annually, the potential savings are likely to be enormous, says public interest law professor John Banzhaf, who developed and helped legalize the concept of differential health insurance premiums, and lobbied for its inclusion for smokers under Obamacare.
Due to a computer glitch, imposing the full 50% surcharge on the oldest smokers will be delayed somewhat. But once that problem is resolved, the financial savings are likely to be even larger, because that's the time of life when smoking-related illnesses like lung and other cancers, heart attacks, strokes, etc. tend to emerge and balloon medical care costs.
For a 55-year-old smoker
forced to pay an additional $4,240 a year, and close to $5,100 more for a 60-year-old [AP estimates], the financial pressure to quit will be enormous, suggests Banzhaf.
Strangely, some health organizations oppose the surcharge, claiming that it may discourage smokers from getting health insurance. But that's nonsense, says Banzhaf, because under Obamacare everyone will be required to have health insurance.
Moreover, for every smoker who can't purchase health insurance because of the high premiums, there are probably several nonsmokers who can't afford it because of the huge and totally unnecessary costs smokers impose on the system, and indirectly on all nonsmokers.
Health organizations also fail to realize that the great majority of smokers already want to quit, but often lack a strong and immediate incentive to do so. Fifth percent more for health insurance every year provides exactly that incentive, says Banzhaf, noting that more than 100 studies have conclusively proven that, despite its addictive nature, raising the cost of smoking reduces tobacco use.
For those who wonder why a similar surcharge is not imposed on workers who are obese, Prof. Banzhaf notes that the federal government has ruled that smoking is simply a “behavior” entitled to no legal protection, whereas obesity has been classified as a "health status" or "disease" sometimes protected under the Americans With Disabilities Act [ADA], thereby distinguishing the two health-related factors.
Prof. Banzhaf helped develop the concept of charging smokers more for health insurance in the mid 1980s, persuaded the National Association of Insurance Commissioners to endorse it, brought two different legal actions to get the federal government to approve it, and helped get it into Obamacare.
JOHN F. BANZHAF III, B.S.E.E., J.D., Sc.D.
Professor of Public Interest Law
George Washington University Law School,
FAMRI Dr. William Cahan Distinguished Professor,
Fellow, World Technology Network,
Founder, Action on Smoking and Health (ASH)
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