ObamaCare and Smokers
ObamaCare Gives Smokers a New Incentive to Quit
We have the facts on ObamaCare and smokers, from the ObamaCare smoker glitch to the amount smoking can increase your premium, ObamaCare affects smokers. Although insurers can't charge more for health status, they can charge more for smoking status. Those of us looking to save money on our health insurance premiums will want to take another look at the true cost of being a smoker. Let's take a look at a scenario below to see how ObamaCare affects smokers.
ObamaCare Smoker Facts
Here are a few things you should know about ObamaCare and smokers:
ObamaCare says smokers can be charged up to 50% more for their premiums. This is due to a "tobacco surcharge".
The tobacco premium surcharge is calculated after cost assistance.
The ObamaCare smokers glitch means the surcharge won't go into affect until 2015.
Statistically, lower-income Americans are the most likely group to smoke.
The ObamaCare Smoker Surcharge: Tobacco Surcharge up to 50% of Premium After Assistance
The ObamaCare smoker surcharge allows insurers to charge a "tobacco surcharge" which is calculated after subsidies received through the marketplace. Smokers may pay up to 50% more than non-smokers for the same health plans.
ObamaCare and Smokers: How Does Smoking Affect Health Insurance Premiums?
It's not a myth, ObamaCare raises premiums for smokers, let's take a look at how ObamaCare affects smoker's premiums.
How does smoking affect your health insurance premiums? This example will help you to understand the the difference smoking can make to your wallet.
Zack Williams is a $9 per hour worker in a Carson City big box store. Presently without health insurance, he will qualify under the new Affordable Care Act for help in buying health insurance. But, Zack is a smoker; to qualify he will need to quit smoking. He rolls his own tobacco, which keeps his smoking costs to less than $10 per month.
Williams, employed seasonally, has a total annual income of $22,000 per year. A baseline insurance plan for him costs $760 per year in annual premiums. He even qualifies for a lower benefit plan that will cost him nothing for premiums, although copayments and deductibles will be higher.
If he keeps smoking, his annual financial penalty will run between $1,600 each year up to $1,900 each year. This penalty puts health insurance out of Zach Williams reach.
ObamaCare: Smokers Can Be Charged Higher Rates
Under ObamaCare smokers can be charged rates up to 50% higher. The new health care law that will see nearly full implementation in 2014 forces health insurance plans to write insurance policies for all comers, even those with pre-existing conditions. Typically, patients with pre-existing conditions use more health care resources than those without. Under the new law, Obamacare requires that their coverage is affordable.
ObamaCare: Smoking is Not a Pre-existing Condition
Smoking is not a pre-existing health condition under Obamacare. As part of the negotiations to get coverage for those with preexisting conditions, insurance companies got the right to impose on smokers premium costs that are as much as 50 percent higher than the same plan for non-smokers. Smokers are high-risk health insurance patients who use more services more often than non-smokers do. The higher premiums are a legal way to encourage smokers to forgo health insurance.
Smokers in the Workforce
Estimates are that 20 percent of the adult United States' workforce smokes. Closer examination of the numbers reveals that the smokers in the workforce average of 20 percent climbs among low-income workers. These employees gravitate towards employers who do not offer health insurance as a benefit and are an important reason the Obamacare became law.
Zach Williams has other problems too. He has gout and high blood pressure, conditions that he has prescriptions for that go unfilled as he says he cannot afford them.
Williams is unsure he can buy insurance even if he manages to quit smoking. While a few states have prohibited a smoking surcharge, Michigan has not. The smoker's penalty can be up 7 percent of his income
The ObamaCare Smoker Glitch
In the short term, Williams will get a break thanks to "the ObamaCare Smoker Glitch". The Smoker Glitch is an anomaly in the government's computer payment computer systems that won't process the tobacco surcharge correctly and won't be fixed until at least 2015. While the smoking surcharge can be up to three time the non-tobacco rate, programmers cannot get the system to make the calculations.
Advocates of the working poor think the glitch should stay in place. They argue that workers who could quit easily have already done so thanks to high cigarette taxes and bans in workplaces on smoking. A long-time smoker like Zack is hard-core. To quit smoking he will need more expensive nicotine replacement therapy. Insured people who continue to smoke will put a financial strain on the entire system, if penalizing them helps to reduce the numbers of smokers everyone gains, the insured, health care providers and health care insurers.
Employees covered under an employer based health plans do not face a tobacco penalty if they enroll in an insurance company sponsored smoking cessation program.
ObamaCare Smoking Cessation Therapy
Zack says he want to quit and take care of himself by taking his medications properly. He agrees that the tobacco penalty may be an incentive to quit. But, coverage for him does not include smoking cessation as, if he buys insurance, it will be through the state exchange. Already 10 states have placed ceilings on premium penalties for individual health insurance coverage.
But, with his first year of coverage, he will be entitled to ObamaCare's new benefits which include smoking cessation therapy. If he succeeds, he will enjoy the non-penalty rate in his second year of coverage. Look for more articles coming soon which address the ObamaCare smoker glitch and make sure to check out the Health Insurance Marketplace to understand how you can save money on your health insurance as a smoker.