Smokers can save hundreds or even thousands of dollars a year by quitting, and not just because they're no longer spending money on cigarettes.
Under the Affordable Care Act, insurance companies will be allowed, starting Jan. 1, to charge smokers up to 50 percent more for health insurance than they charge nonsmokers. That doesn't mean all insurers will impose the highest allowable surcharge, but it does mean that for those who quit smoking — or even try to quit — it could pay off on their health insurance.
Most private insurers, plus Medicare and Medicaid, cover the cost of smoking-cessation programs or will do so starting in January. No matter what their insurance status, smokers can find many programs that charge less than $100. Free assistance also is available from several sources, including the states of Nebraska and Iowa.
However smokers choose to stop smoking, taking part in a smoking-cessation program is enough for them to avoid higher health insurance rates, said Cliff Gold, chief operating officer of CoOportunity Health, an insurer selling policies on the federal insurance marketplace in Nebraska and Iowa.
“The question that is asked of people on the application is pretty innocuous,” he said. “'In the last six months, have you smoked at any time during that period?' They define smoking as four or more times a week.
“If someone is currently enrolled in a tobacco-cessation program, they can answer that question 'No.' ”
If people lie on the form, Gold said, “they would be committing fraud. If you can prove that they were a smoker, and have been, you can go back and charge them the premium that they would have paid.”
The differences in rates between smoker and nonsmoker can be significant.
A look at rates on the Nebraska state insurance marketplace shows a 42-year-old who smokes would pay in excess of $700 more per year than a nonsmoker for a “silver” level plan offered by Coventry in association with Alegent Creighton Health. A 57-year-old nonsmoker would pay more than $1,100 less than a smoker would pay for a “bronze” level plan offered by Health Alliance Midwest.
Some groups are critical of any smoker surcharge, saying there's no evidence it will discourage smoking. They say it may even keep smokers from buying health insurance at all.
Imposing the higher rates is “a business decision,” said David Holmquist, a lobbyist for the American Cancer Society's Cancer Action Network. Health advocates, he said, are more concerned about “trying to get people to quit smoking rather than penalizing them.”
Gold said smokers simply cost insurers more. “The health care utilization of smokers is significantly higher than nonsmokers,” he said.
Tom Gilsdorf, director of individual product development for Blue Cross Blue Shield of Nebraska, said smokers have higher rates of cancer, chronic obstructive pulmonary disease and heart disease than nonsmokers. But major diseases, he said, aren't the only area where smokers outpace nonsmokers. Relatively minor ailments tend to affect smokers more than nonsmokers, he said. “If (smokers) have a virus, it tends to be worse,” he said. “Some of that day-to-day stuff can be more problematic if you are a chronic smoker.”
CoOportunity plans to charge smokers on the individual market 49 percent more than nonsmokers, Gold said. Blue Cross plans to increase the surcharge on individual policies from the 25 percent it is today to 31 percent in 2014.
The goal, Gilsdorf said, is to set premiums closer to the cost of insuring the person. But he said officials also “hope to encourage healthy behavior, whether through quitting smoking or leading an active lifestyle, to reduce the use of services.”
|Higher monthly rates for smokers|
|Monthly rates for health insurance plans offered through Nebraska's marketplace show how much more smokers will pay than nonsmokers. Smokers can avoid the higher rates by quitting or by enrolling in a smoking-cessation program. Some examples of the monthly rates:|
|Bronze (low-price) plans|
|BCBS SelectBlue Plus $4,500:|
|Nonsmoker, age 27: $196.95|
|Smoker, age 27: $259.97|
|Nonsmoker, age 42: $267.49|
|Smoker, age 42: $400.96|
|Coventry Silver $10 Copay HMO Methodist Health Partners:|
|Nonsmoker, age 57: $516.77|
|Smoker, age 57: $620.12|
|Health Alliance Midwest Pathfinder POS 1750/3500 30% 5500/11000 Rx3:|
|Nonsmoker, age 27: $294.41|
|Smoker, age 27: $347.40|
|BCBS SelectBlue Plus $750:|
|Nonsmoker, age 57: $686.19|
|Smoker, age 57: $905.77|
|Nonsmoker, age 42: $368.59|
|Smoker, age 42: $552.53|