US's Credit Rating Threatened by Unhealthy Habits
Effective Remedies Known But Little Used or Discussed
Moody's have warned that the US will soon lose it triple-A credit rating unless it takes "radical action" to curb health care costs, especially spending on Medicare and Medicaid, which have risen to 45% of total federal spending, up from only 25% in 1975. The single major preventable cause of such unnecessary spending is smoking.
Unfortunately, despite much talk about health care reform and increasing insurance coverage, there is virtually no serious discussion in the current presidential campaigns or elsewhere about actually reducing escalating health care costs, even though methods to reduce smoking are very well known and proven successful in many areas, complains Action on Smoking and Health (ASH), the nation's oldest antismoking organization.
For example, California was able to slash its smoking rate from 17.5% in 1998 to only 13.3% in 2006 -- the national average is about 21% -- by banning smoking in virtually all public places, imposing a high cigarette tax, and using some of the proceeds to help fund effective antismoking messages.
New York City is another example, since it was able to slash its smoking rate among high school students from 17.8% to only 8.5%, its deaths from smoking-induced cardiovascular disease by 14%, and its mortality rate to an all-time low by likewise becoming virtually smoke free and imposing draconian cigarette taxes.
Health care costs can also be cut simply by making those who inflate them pay more of their fair share of the costs. Smoking costs the American economy about $140 billion each year, most of which is paid by nonsmokers in the form of higher taxes (for Medicare, Medicaid, Veterans' benefits, etc.) and inflated health insurance premiums.
Looked at another way, every pack of cigarettes sold in the US increases medical costs by well over $3/pack, costs which must be passed along to employers and nonsmoking employees in the form of bloated premiums if health insurance companies charge smokers and nonsmokers the same rates.
However, by charging smokers more for health insurance, just as virtually all companies already charge them more for life insurance, smokers could be forced to pay more of their fair share of these enormous costs. Some health insurance companies may think that charging smokers different rates constitutes illegal discrimination, but the federal government has approved of such differential health insurance rates for more than 20 years, and recently reaffirmed its position in a letter ruling to ASH.
"Using differential health insurance premiums -- as a growing number of companies are already doing -- provides a strong tangible and immediate incentive to help smokers quit, and also serves as a constant reminder and very effective and inexpensive educational campaign about the very real dangers of smoking," says John Banzhaf of ASH.
A small but growing number of companies is actually going even further by insisting on a smokefree work force, just as many insist on a drugfree work force. In other words, many companies openly or otherwise simply refuse to hire people who smoke, even if they do so off the job, because such smoking inflates not only the company's health insurance costs, but also its disability payments.
In summary, says Banzhaf, vague talk about eliminating waste and improving efficiency will continue to do little to actually preserve the US's financial solvency by reducing health care costs, and will be increasingly overwhelmed as baby boomers get older and naturally need more health care.
On the other hand, we could slash these unnecessary health care expenses at no cost whatsoever to taxpayers by prohibiting smoking in public places, increasing cigarettes taxes, using this revenue and that from the multi-state tobacco settlement for effective antismoking programs, and by encouraging if not mandating health insurance companies to make smokers pay more of their fair share of the costs of their smoking imposes on everyone.
PROFESSOR JOHN F. BANZHAF III
Executive Director and Chief Counsel
Action on Smoking and Health (ASH)
2013 H Street, NW
Washington, DC 20006, USA
(202) 659-4310
