ObamaCare and Smokers
ObamaCare Gives Smokers a New Incentive to Quit
Get the facts on ObamaCare and smokers. From ObamaCare’s smoking cessation benefits to the amount smoking can increase premiums, ObamaCare affects smokers.
Although insurers can’t charge more for health status, they can charge up to 50% more for smoking status. On the flip side of this ObamaCare includes smoking cessation therapy (including medication) as a free preventive service on all non-grandfathered plans sold since September 23, 2010.
Those of us looking to save money on our health insurance premiums will want to reexamine the true cost of being a smoker. Below we take a look at some facts about smoking and the Affordable Care Act.
ObamaCare Smoker Facts
Here are a few things you should know about ObamaCare and smokers:
- ObamaCare makes it so you can’t be denied coverage for being a smoker now or in the past.
- ObamaCare requires all plans sold after September 23, 2010 cover smoking cessation therapy (including smoking cessation drugs) at no out-of-pocket cost.
- Small group plans offered by small employers must also cover smoking cessation. Typically Medicaid, Medicare, and large group plans also offer smoking cessation therapy. See this fact sheet from the American Lung Association to Learn more about smoking cessation under the ACA.
- Short term plans and other plans not considered major medical coverage don’t have to follow the same rules in regards to smoking. As such you can be denied short term coverage for being a smoker and don’t have to be given free cessation therapy.
- Extra specialized cessation therapy is offered to pregnant women.
- In general you count as a smoker if you use tobacco four or more days a week for the past 6 months. If you are quitting, or smoke once in a while, or use tobacco for ceremonies, you may not qualify as a smoker.
- You must report whether or not you are a smoker. Giving the information is based on the honor system, however you can be denied coverage due to fraud or misrepresentation, so answer honestly.
- ObamaCare says smokers can be charged up to 50% more for their premiums. This is due to a “tobacco surcharge”.
- Those on employer health plans can avoid the surcharge by joining an employer based tobacco cessation program.
- Due to a “ObamaCare smoking glitch” where programmers couldn’t get the charge to calculate correctly the tobacco surcharge wasn’t implemented until 2015 in many states.
- The tobacco premium surcharge is calculated after cost assistance, not before.
- 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.
Does ObamaCare Cover Quitting Smoking?
Beginning September 23, 2010, non-grandfathered group coverage and non-grandfathered individual health insurance policies must cover smoking cessation therapy and medication with no cost sharing. Or more technically they must cover “evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (USPSTF).” As of 2014 cessation these services have been included on all plans as an “essential health benefit“.
Smoking Cessation as an Essential Benefit
Although functionally all plans have covered smoking cessation as a free preventive service since 2010, all plans sold after 2014 now cover smoking cessation as part of “ten essential health benefits“. Ten essential health benefits are treatments from ten categories essential to a person’s health. One of those categories is “mental health services and addiction treatment”, this category includes essential therapy and medication needed to help you quit smoking (it also covers other mental health treatments, rehabs, and other addiction treatments). Although some essential benefits are subject to cost sharing, smoking cessation in particular is considered a free preventive service and is not subject to cost sharing.
Do I Have to Pay Cost Sharing on Smoking Cessation Under ObamaCare?
ObamaCare requires preventive benefits, including tobacco cessation treatment, to be covered with no cost sharing. Cost-sharing includes co-payments, co-insurance, and deductibles.
Although smoking cessation is covered on all non-grandfathered plans, there is typically a limit on the types and amounts of therapy sessions and medication you can receive each year. If you get a medication or treatment not covered by your plan you may owe a cost sharing amount. Make sure to check with your insurer before accessing treatments to check what is covered in-network.
What Types of Smoking Cessation Is Covered Under ObamaCare?
ObamaCare covers smoking cessation therapy and smoking cessation medication. Exactly what will be covered and what amounts will be covered will vary from plan to plan, but treatments could include:
- Phone counseling
- Group counseling
- Individual counseling
- Tobacco cessation medication including brand name or generic drugs similar to: Inhalers, Lozenges, Gum like Nicorette, and/or drugs like Wellbutrin and Chantix
NOTE: Every plan is different, plans only have to offer the minimum recommended treatments with no out-of-pocket costs. You may pay more for additional treatments and non-generic drugs.
You can learn more about the ACA and common smoking cessation treatments from tobbaccofreekids.org.
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. Although the full 50% surcharge could price many out of health insurance (remember it’s calculated after subsidies, not before), most insurers won’t charge the full 50% surcharge.
ObamaCare and Smokers: How Does Smoking Affect Health Insurance Premiums?
It’s not a myth, ObamaCare raises premiums for smokers. This isn’t to say that smokers weren’t charged more before the ACA, they were and they could even be denied coverage because smoking could be treated as a preexisting condition. While ObamaCare got rid of preexisting conditions ensuring coverage for smokers and non-smokers alike, it retained the concept of smokers paying increased premiums.
Let’s take a look at an example of to help us better understand how ObamaCare affects premiums for smokers.
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: 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 wasn’t corrected until 2015 in some instances. Going into open enrollment 2016 Zach will either need to join a cessation program or face the surcharge.
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.
Other Sections of the Affordable Care Act that Help Smokers Quit
ObamaCare doesn’t just raise rates and help people quit smoking. These other sections improve smoking cessation services for Medicare and Medicaid:
Sec. 2502. Elimination of exclusion of coverage of certain drugs. Beginning with drugs dispensed on January 1, 2014, smoking cessation drugs, barbiturates, and benzodiazepines would be removed from Medicaid’s excludable drug list.
Sec. 4103. Medicare coverage of annual wellness visit providing a personalized prevention plan. Provides coverage under Medicare, with no co-payment or deductible, for an annual wellness visit and personalized prevention plan services. Such services would include a comprehensive health risk assessment. The personalized prevention plan would take into account the findings of the health risk assessment and include elements such as: a five- to ten-year screening schedule; a list of identified risk factors and conditions and a strategy to address them; health advice and referral to education and preventive counseling or community-based interventions to address modifiable risk factors such as physical activity, smoking, and nutrition.
Sec. 4108. Incentives for prevention of chronic diseases in Medicaid. The Secretary would award grants to States to provide incentives for Medicaid beneficiaries to participate in programs providing incentives for healthy lifestyles. These programs must be comprehensive and uniquely suited to address the needs of Medicaid eligible beneficiaries and must have demonstrated success in helping individuals lower or control cholesterol and/or blood pressure, lose weight, quit smoking and/or manage or prevent diabetes, and may address co-morbidities, such as depression, associated with these conditions.
Sec. 4004. Education and outreach campaign regarding preventive benefits.Directs the Secretary to convene a national public/private partnership for the purposes of conducting a national prevention and health promotion outreach and education campaign. The goal of the campaign is to raise awareness of activities to promote health and prevent disease across the lifespan. The Secretary will conduct a national media campaign on health promotion and disease prevention focusing on nutrition, physical activity, and smoking cessation using science-based social research. The Secretary shall also maintain a web-based portal that provides informational guidelines on health promotion and disease prevention to health care providers and the public as well as a personalized prevention plan tool for individuals to determine their disease risks and obtain tailored guidance on health promotion and disease prevention. In addition, the Secretary will provide guidance and relevant information to States and health care providers regarding preventive and obesity-related services that are available to Medicaid enrollees, including obesity screening and counseling for children and adults. Each State would be required to design a public awareness campaign to educate Medicaid enrollees regarding availability and coverage of such services.
ObamaCare: Smokers May Be Charged 50% More for Health Insurance, but Can no Longer Be Denied Coverage.