Two longtime rivals—Big Tobacco and anti-cancer activists—are teaming up to fight an Affordable Care Act (ACA) provision that allows insurers to charge consumers 50% more if they use tobacco products, the Washington Post's "Wonkblog" reports.
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Starting in 2014, the ACA will curtail a host of discriminatory insurance practices, including gender rating and charging seniors more than three times the cost of premiums for younger enrollees. However, the health reform law will allow insurers to levy a 50% tobacco surcharge on premiums for smokers and prevent low- and middle-income individuals from using tax credits to offset the penalty.
Tobacco companies—including Altria, which owns Philip Morris—argue that the policy is discriminatory against smokers.
Meanwhile, the American Cancer Society (ACS) fears that high surcharges could render health insurance unaffordable for cigarette smokers, who are disproportionately low-income. "We're anti-smoking, not anti-smoker," says David Woodmansee, the society's associate director for state and local campaigns.
An analysis by the Institute for Health Policy Solutions estimates that the tobacco surcharge could cause a low-income individual's annual premiums to increase from $708 to $3,308.
To address the issue, ACS is adopting a state-by-state approach: Five states already prohibit insurance companies from charging smokers higher premiums than non-smokers, and others now are considering revising their policies moving forward.
For example, California, which has already prohibited the practice in its health exchange, is weighing a measure that would apply to carriers who sell outside the market. New Hampshire, by contrast, is considering a bill that would codify the ACA provision.
Tobacco companies and the ACS plan to monitor state Legislatures and influence some to roll back the provision. Members of the ACS policy team are developing a template for testimony they could provide at upcoming legislation hearings on the issue. "It is the law of the land, but we will be supportive of states that try to resist the surtax," says Steve Finan, ACS's policy director (Kliff, "Wonkblog," Washington Post, 2/18).