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Penalty could keep smokers out of health overhaul
http://news.yahoo.com/penalty-could-keep-smokers-health-overhaul-205840155.html
WASHINGTON (AP) — Millions of smokers could be priced out of health insurance because of tobacco penalties in President Barack Obama's health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.
The Affordable Care Act — "Obamacare" to its detractors — 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 smokes.
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 health care 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 less to younger ones.
And finally, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.
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.
"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.
In today's world, insurers can simply turn down a smoker. Under Obama's overhaul, would they actually 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, a consultant 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," said Laszewski. "They are going to have to play defense."
WASHINGTON (AP) — Millions of smokers could be priced out of health insurance because of tobacco penalties in President Barack Obama's health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.
The Affordable Care Act — "Obamacare" to its detractors — 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 smokes.
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 health care 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 less to younger ones.
And finally, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.
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.
"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.
In today's world, insurers can simply turn down a smoker. Under Obama's overhaul, would they actually 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, a consultant 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," said Laszewski. "They are going to have to play defense."
Healthy societies do look after each other. So it's tough to find that nice middle ground where we are able to do that without encouraging or accepting poor behaviors.
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Very well said. And since the tobacco companies invested millions into getting ppl addicted to their drug they have an equal responsibility in this and should be contributing to healthcare. After all their product was responsible for eroding the health of the people who became addicted.
We hold the pushers responsible in other walks of life...
Yes, it is a fine line and like everything else, quite complex.
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Very well said. And since the tobacco companies invested millions into getting ppl addicted to their drug they have an equal responsibility in this and should be contributing to healthcare. After all their product was responsible for eroding the health of the people who became addicted.
We hold the pushers responsible in other walks of life...
Yes, it is a fine line and like everything else, quite complex.
Hardly a hard nose...lol. And you know, I do agree with personal responsibility and being held accountable for our actions and choices. It is important and the only way people learn. One of the things I strive very hard to do at work is to work with folks to stand on their own two feet, not enable negative behaviors. So I can't say I disagree completely with your stance.
For me it's a fine line I guess. I do believe that we all have to take personal responsibility for our actions, but at the same time, I believe that a society that looks after each other is important too. I know from talking to you that that is important to you as well. Neither of us wants to see an "every man for himself without exception" way of life. Healthy societies do look after each other. So it's tough to find that nice middle ground where we are able to do that without encouraging or accepting poor behaviors. I'm sure with this situation, like most, the real solution probably combines a bit of both.
For me it's a fine line I guess. I do believe that we all have to take personal responsibility for our actions, but at the same time, I believe that a society that looks after each other is important too. I know from talking to you that that is important to you as well. Neither of us wants to see an "every man for himself without exception" way of life. Healthy societies do look after each other. So it's tough to find that nice middle ground where we are able to do that without encouraging or accepting poor behaviors. I'm sure with this situation, like most, the real solution probably combines a bit of both.
I haer what you are saying, but when I was smoking regularly back in the day and felt well, I thought I would be one of the lucky ones who would escape sickness caused by smoking. I think as it got more expensive to smoke I started reconsidering and then later due to to ther health problems I didn't even want to smoke. I guess when it is related to addiction, it is too easy to go into denial.
However I don't think of it as penalizing.
If I knowingly do things to my body that science has proven has a very good chance of making me sick, then I should expect to be able to pay for the cost of that additional care. This really doesn't sit well with me, mind you, but it has to do with expecting others to pay for the errors of my ways and self accountability.
Like I keep saying I am not comfortable with it but on some level it rings true for me. Such a hard nose, eh?
However I don't think of it as penalizing.
If I knowingly do things to my body that science has proven has a very good chance of making me sick, then I should expect to be able to pay for the cost of that additional care. This really doesn't sit well with me, mind you, but it has to do with expecting others to pay for the errors of my ways and self accountability.
Like I keep saying I am not comfortable with it but on some level it rings true for me. Such a hard nose, eh?
As usual, I truly believe the answer to these somewhat self inflicted health challenges lie in Education, not legislation. Most people I have met (myself included) want to make healthy changes in their lives. Let's teach them how. Let's provide healthy alternatives that don't break the bank. I mean, the truth is, eating healthy is far more expensive then eating fast food. Perhaps something could be done to change that. We have long had a huge education campaign around smoking here. Graphic (and frankly scary) photo warning on cigarette packages is one. And trust me, they do have an impact. They don't work as well for those of us that are already addicted, but they are a deterrent for the next generation. It is illegal here to sell cigarettes to anyone under 18 and the fines are pretty stiff.
Another part of the equation (yep, here I go) is easy access to preventative medicine. Often a trusted Dr. explaining that folks are potentially shortening their life span by certain behaviors can have an impact. Plus, it's far less expensive to catch many of these illness' early on rather then once they've advanced.
I just think there are so many other things that can be done to work with people to live a healthy life then just legislating it. Penalizing people isn't going to make the difference, but teaching them very well might.
Another part of the equation (yep, here I go) is easy access to preventative medicine. Often a trusted Dr. explaining that folks are potentially shortening their life span by certain behaviors can have an impact. Plus, it's far less expensive to catch many of these illness' early on rather then once they've advanced.
I just think there are so many other things that can be done to work with people to live a healthy life then just legislating it. Penalizing people isn't going to make the difference, but teaching them very well might.
I feel very uncomfortable with these ideas as a former smoker but it does seem correct to expect people who are obese (unrelated to thyroid conditions) and who smoke or drink a lot to pay a higher premium since they are partly responsible for their health problems.
I don't know...it doesn't sit comfortably with me but I think all the conservatives on this forum have rubbed off on me over the year. It is a matter of taking responsibility for health and our lives.
On the other hand I am afraid it could be taken too far and maybe end up making healthcare prohibitive for people who really need the help.
Definitely something to hash out.
I don't know...it doesn't sit comfortably with me but I think all the conservatives on this forum have rubbed off on me over the year. It is a matter of taking responsibility for health and our lives.
On the other hand I am afraid it could be taken too far and maybe end up making healthcare prohibitive for people who really need the help.
Definitely something to hash out.
I agree that if they are going to single out smokers, they should single out the other entities in life that are not healthy as well. I also think these people who do the unhealthy known things should pay more, but that much more? I think they just need to bring about the public option and be done with it.
The only way they should be able to do this is if smoking became illegal.
On the same note, I am working with a client of mine who is very ill with COPD get back on his feet. He has heart issues as well, and just has physically been unable to hold down a job. I need a letter from his Dr. to get him proper financial support - I'm talking about survival here. His Dr. said to him "your fat and you smoke, you did this to yourself". Nice huh. I've got him connected to another medical clinic now. Just outrageous.
Not sure about the US, but here in Canada we pay (yep, I'm an on again off again smoker) huge huge taxes on cigarettes. A pack of 25 costs $11.00 now. Most of that is tax. That pays into the Health Care System.
On the same note, I am working with a client of mine who is very ill with COPD get back on his feet. He has heart issues as well, and just has physically been unable to hold down a job. I need a letter from his Dr. to get him proper financial support - I'm talking about survival here. His Dr. said to him "your fat and you smoke, you did this to yourself". Nice huh. I've got him connected to another medical clinic now. Just outrageous.
Not sure about the US, but here in Canada we pay (yep, I'm an on again off again smoker) huge huge taxes on cigarettes. A pack of 25 costs $11.00 now. Most of that is tax. That pays into the Health Care System.
Excellent point NG. Where will the line end?
Where will the outcry from liberals be now???
Yeah, I heard that yesterday. That's real nice. So much for everyone having access to affordable health care. Maybe it should be called the AACA "Almost Affordable Care Act"??
Hey, I'm ALL for smokers paying more...absolutely. It's that way now anyway, but 50%??? That's not fair, that's discriminatory, and I hope they don't get away with it.
What about obese people? Are THEY going to be penalized? Obesity leads to more health care costs than smoking. There are all kinds of risk factors like that where people could be charged more...is it going to be fair accross the board, or are only smokers going to be singled out?
What about drug addicts?
Hey, I'm ALL for smokers paying more...absolutely. It's that way now anyway, but 50%??? That's not fair, that's discriminatory, and I hope they don't get away with it.
What about obese people? Are THEY going to be penalized? Obesity leads to more health care costs than smoking. There are all kinds of risk factors like that where people could be charged more...is it going to be fair accross the board, or are only smokers going to be singled out?
What about drug addicts?
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