Saturday, April 13, 2013
Obamacare: Smoke’n Up-rates and No Subsidy
"Smokers, beware: tobacco penalties under President Obama’s Affordable Care Act could subject millions of smokers to fees costing thousands of dollars, making healthcare more expensive for them than Americans with other unhealthy habits.
The Affordable Care Act, which critics have also called “Obamacare”, could subject smokers to premiums that are 50 percent higher than usual, starting next Jan 1. Health insurers will be allowed to charge smokers penalties that overweight Americans or those with other health conditions would not be subjected to.
A 60-year-old smoker could pay penalties as high as $5,100, in addition to the premiums, the Associated Press reports. A 55-year-old smoker’s penalty could reach $4,250. The older a smoker is, the higher the penalty will be.
Nearly one in every five U.S. adults smokes, with a higher number of low-income people addicted to the unhealthy habit. Even though smokers are more likely to develop heart disease, cancer and lung problems and would therefore require more health care, the penalties might devastate those who need help the most – including retirees, older Americans, and low-income individuals.” (1)
“The law, known as the Patient Protection and Affordable Care Act, was — as its name implies — ostensibly designed to make health insurance affordable to Americans. It prohibits insurers from turning down or charging more to individuals with pre-existing conditions and even certain conditions (such as obesity) that increase the risk of health problems.
However, the one condition that the law does not protect from high insurance rates is nicotine addiction — despite the fact that smoking is associated with a number of serious health problems including heart disease and lung cancer. In fact, it specifically permits insurers to charge higher rates to older smokers than to nonsmokers or even younger smokers. Under the law, older adults in general may be charged up to triple what younger ones are charged (which could end up harming the young by hiking their rates). Smokers may, in addition, be charged up to 50 percent more than nonsmokers for their coverage, but younger smokers may be hit with a lesser penalty than older ones. Plus, the subsidies the government provides to offset the cost of insurance purchased on the individual market cannot be applied to the smoking penalty.” (2)
"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." (3)
Upon further review, the ACA forbids discriminatory pricing except for those conditions ACA wants to discriminate against. Hmmm. Non-discriminatory discriminatory pricing. Very nice indeed! Load up on those Twinkies but stay away from those smokes.
Wait a minute! ACA is supposedly an attempt to insure the uninsured and predominately aimed at lower income individuals. You know, “affordable care act”. Affordable care [insurance] for those that supposedly can’t afford insurance. However, as with all intention oriented do-gooder schemes, the negative cascading unintended consequences become the results. Hence uninsured lower income James Goodsmoker suffers a 50% up-rate that will not qualify for an Obamacare subsidy. James Goodsmoker finds coverage as unaffordable under the “affordable care act” as he did prior to ACA. Go figure. (4)
A question to ponder: since sixteen million of the uninsured will be herded into Medicaid, will the federal government charge itself a 50% up-rate for the subsection of the sixteen million that smoke?
(1) 'Obamacare' to hit smokers with huge penalties, rt.com
(2) Under ObamaCare, It’s Quit Smoking or Pay the Price — Literally, thenewamerican.com
(3) Obamacare to Hit Smokers with Huge Penalties, newsmax
(4) Socioeconomic status and smoking, oxford journals.org