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Smokers May Not Be Able To Afford Obamacare

The Affordable Care Act allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1.

WASHINGTON – Millions of smokers could be priced out of health insurance because of tobacco penalties in President Obama’s health-care law, according to experts who are teasing out the potential impact of a little-noted provision in the massive legislation.

The Affordable Care Act — or “Obamacare” — allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1.

For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.

Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration. But older smokers could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.

Workers covered on the job would be able to avoid tobacco penalties by joining smoking-cessation programs, because employer plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually.

Nearly one of every five U.S. adults smokes. That share is higher among lower-income people, who also are more likely to work in jobs that don’t come with health insurance and would therefore depend on the new federal health-care law. Smoking increases the risk of developing heart disease, lung problems and cancer, contributing to nearly 450,000 deaths a year.

Insurers won’t be allowed to charge more under the overhaul for people who are overweight, or have a health condition like a bad back or a heart that skips beats — but they can charge more if a person is a smoker.

Starting next Jan. 1, the federal health-care law will make it possible for people who can’t get coverage now to buy private policies, providing tax credits to keep the premiums affordable. Although the law prohibits insurance companies from turning away the sick, the penalties for smokers could have the same effect in many cases, keeping out potentially costly patients.

“We don’t want to create barriers for people to get health-care coverage,” said California state Assemblyman Richard Pan, who is working on a law in his state that would limit insurers’ ability to charge smokers more. The federal law allows states to limit or change the smoking penalty.

“We want people who are smoking to get smoking-cessation treatment,” added Pan, a pediatrician who represents the Sacramento area.

Obama administration officials declined to be interviewed for this article, but a former consumer-protection regulator for the government is raising questions.

“If you are an insurer and there is a group of smokers you don’t want in your pool, the ones you really don’t want are the ones who have been smoking for 20 or 30 years,” said Karen Pollitz, an expert on individual health-insurance markets with the nonpartisan Kaiser Family Foundation. “You would have the flexibility to discourage them.”

Several provisions in the federal law work together to leave older smokers with a bleak set of financial options, said Pollitz, formerly deputy director of the Office of Consumer Support in the federal Health and Human Services Department.

First, the law allows insurers to charge older adults up to three times as much as their youngest customers.

Second, the law allows insurers to levy the full 50 percent penalty on older smokers while charging younger ones less.

And finally, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.

“The effect of the smoking (penalty) allowed under the law would be that lower-income smokers could not afford health insurance,” said Richard Curtis, president of the Institute for Health Policy Solutions, a nonpartisan research group that called attention to the issue with a study about the potential impact in California.

Now, insurers can simply turn down a smoker. Under Obama’s overhaul, would they charge the full 50 percent? After all, workplace anti-smoking programs that use penalties usually charge far less, maybe $75 or $100 a month.

Robert Laszewski, who previously worked in the insurance industry, says there’s a good reason to charge the maximum.

“If you don’t charge the 50 percent, your competitor is going to do it, and you are going to get a disproportionate share of the less-healthy older smokers,” Laszewski said.


photo credit: zubrow via photopin cc


  1. deborah talbert February 8, 2013

    i am speaking for many people that do not have health insurance and also are smokers. this is discrimination on the smokers part. us the american people used to have rights but they are slowly disappearing. i was approved for disability but am not eligible for medicare until august 2014. how is obama care suppose to help the people that really cant afford it in the first place? first off you will bee penalized if you do not have it by 2014 and secondly now they have control of us if we are smokers to penalize us for being smokers. we all were misled. (no one will go without health insurance in 2014). we thought that there would be help for those without insurance not to penalize us. alot of us cant afford to eat properly now whats it going to be like when we have to have insurance and we are going to pay higher premiums for being a smoker. it is an addiction. are they doing the same with drinkers and druggies? my husband was hit by a truck in 2001 and we couldnt pay our mortgage payment so we moved out of the house because we could no longer afford to be there. the financial institution will not repo it because they lent us more than it was worth. it is caving in and has been vandilized. no one could live there if they wanted to but it is considered an asset if you go to the dept of human services to try to get help. you are turned down. no matter how bad the situation is. hows that for justice. i used to be proud to be an american. but im not so sure now how i feel.

  2. Peggy February 13, 2013

    Pretty scary! I am a smoker and I have tried to quit, unsuccessfully. Why not charge the tobacco company’s for our premiums. They lied to us .

  3. art February 24, 2013

    i am tired of everyone blaming the tobacco companies for a choice that you made yourself!!!! they did not stand there and twist your arm and tell you that you had to smoke!!! how about people taking responsibillity for their own actions!!!! quit crying like a little baby and grow up!!! as far as the charge on smokers for osuckacare, how about those that drink, do drugs, and are nothing but a fat ass!!! why don’t they have to pay more….as far as them saying that smoking causes (about) that is about because they have no real numbers!……fat ass sorry people cost health care companies more money than any other group!!

  4. francine March 12, 2013

    You can quit smoking….I did…I smoked for 25 years and have been quit for 4 months. You gotta go thru some discomfort, but that is over in a few wks.

  5. Denise March 20, 2014

    I totally agree with you art. Smokers get blamed for everything…EVERYTHING! if all the smokers quit all at once, who’s going to take on the exuberant amount of taxes that will be lost if they do? The finger pointing nose snubbing non-smokers? obamacare sucks. I can’t afford it.

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