2009-05-22 16:06:43 - Amidst growing concerns that the U.S. may soon lose its AAA credit rating, everybody seems to be ignoring reports that escalating health care costs - which could be slashed easily and at virtually no cost by focusing on smoking - are a major cause.

In reports that Treasury Secretary Timothy Geithner is concerned that the U.S. may lose its AAA credit rating, Bloomberg News stated that "The dollar extended declines today after Treasuries and American stocks slumped on concern the U.S. government’s debt rating may at some point be lowered. Bill Gross, the co-chief investment officer of Pacific Investment Management Co., said the U.S.

'eventually' will lose its AAA grade."

Yet that and other reports failed to note that Moody's had warned more than a year ago that the US will soon lose it triple-A credit rating unless it takes "radical action" to curb health care costs, especially spending on Medicare and Medicaid, which have risen to 45% of total federal spending, up from only 25% in 1975. SEE: www.ft.com/cms/s/0/fcc631cc-bfe6-11dc-8052-0000779fd2ac.html

But no one seems to be addressing the single major preventable cause of such unnecessary health care costs which is smoking. Smoking costs the American economy almost $200 billion a year; costs which could be slashed with simple proven steps at virtually no cost.

Unfortunately, despite much talk about health care reform and increasing health insurance coverage, there has been virtually no serious discussion about actually reducing escalating health care costs, even though methods to reduce smoking are very well known, have proven successful in many areas, and cost virtually nothing to implement, complains Action on Smoking and Health (ASH), the nation's oldest antismoking organization.

For example, California was able to slash its smoking rate from 17.5% in 1998 to only 13.3% in 2006 - the national average is today about 20% - by banning smoking in virtually all public places, imposing a high cigarette tax, and using some of the proceeds to help fund effective antismoking messages, notes public interest law professor John Banzhaf, Executive Director of ASH.

New York City is another example, since it was able to slash smoking among high school students from 17.8% to only 8.5%, its deaths from smoking-induced cardiovascular disease by 14%, and its mortality rate to an all-time low by likewise becoming virtually smoke free and imposing high cigarette taxes.

Health care costs can also be cut simply by making those who inflate them pay more of their fair share of the costs. Today, most of the costs of smoking are paid by nonsmokers in the form of higher taxes to support Medicaid, Medicare, veteran's benefits, Indian benefits, and a variety of other federal, state, and local health care program, and in inflated health insurance premiums falling on both workers and employees. ASH agues this is both unfair and unnecessary.

Thus it's only fair to make smokers pay more of their health care costs - e.g., by increased charges under Medicaid and Medicare - since every pack of cigarettes sold in the US increases medical costs by well over $3/pack; costs which must be passed along to employers and nonsmoking employees in the form of bloated premiums if health insurance companies charge smokers and nonsmokers the same rates.

However, by charging smokers more for health insurance, just as virtually all companies already charge more for life insurance, smokers could be forced to pay more of their fair share of these enormous costs. Some health insurance companies may think that charging smokers different rates constitutes illegal discrimination, but the federal government has approved of such differential health insurance rates for more than 20 years, and recently reaffirmed its position in a letter ruling to ASH. ASH suggests that such differential health insurance premiums be incorporated in any health care reform plans adopted by the U.S.

"Using differential health insurance premiums - as a growing number of companies are already doing - provides a strong tangible and immediate incentive to help smokers quit, and also serves as a constant reminder and very effective and inexpensive educational campaign about the very real dangers of smoking," says John Banzhaf of ASH.

A small but growing number of companies is actually going even further by insisting on a smokefree work force, just as many insist on a drugfree work force. In other words, many companies openly or otherwise simply refuse to hire people who smoke, even if they do so off the job, because such smoking inflates not only the company's health insurance costs, but also its disability payments.

In summary, says Banzhaf, vague talk about eliminating waste and improving efficiency in health care will continue to do little to actually preserve the US's financial solvency by reducing health care costs, and will be increasingly overwhelmed as baby boomers get older and naturally need more health care.

On the other hand, we could slash these unnecessary health care expenses at no cost whatsoever to taxpayers by prohibiting smoking in public places, increasing cigarettes taxes, using this revenue and that from the multi-state tobacco settlement for effective antismoking programs, and by encouraging if not mandating health insurance companies to make smokers pay more of their fair share of the costs of their smoking imposes on everyone.

PROFESSOR JOHN F. BANZHAF III
Professor of Public Interest Law, and Executive Director
Action on Smoking and Health (ASH)
2013 H Street, NW, Washington, DC 20006, USA
(202) 659-4310 // ash.org/