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Smokers Face 50% Surcharge Under Obamacare With No Easy Way Out
Regulations just proposed to implement the Affordable Care Act to incorporate a 50% surcharge on employees and family members who smoke, and the hope by some nicotine addicts to escape by sitting through a smoking cessation class may go up in smoke,
By: Professor John Banzhaf, GWU Law School
Some have pointed to language in the rulemaking proposal which says that "a health insurance issuer in the small group market would be required to offer a tobacco user the opportunity to avoid paying the full amount of the tobacco use surcharge . . . if he or she participates in a wellness program meeting [certain requirements]
So some smokers may be hoping to just sit through a smoking cessation class to avoid the surcharge.
But, for several reasons, that may not be successful.
The language quoted above comes from wellness programs, which are based on a very different concept, explains Banzhaf. Under so-called "health-contingent"
But, notes Banzhaf, the government ruled, in an action he successfully brought, that while other health outcomes like reducing obesity (for example) had to meet the many federal requirements of wellness plans, smoking did not, since, as the government ruled: "While being a smoker is a behavior, not a health status, arguably the condition of obesity is a health status."
Also, notes Banzhaf, even the text of the proposed rulemaking provides only that a smoker may "avoid paying the FULL amount of the tobacco use surcharge," [emphasis added] by participating in a wellness program if one exists, but then only if the financial incentives happen to equal the amount of the smoker surcharge.
Moreover, the proposed rulemaking also expressly provides that: "In other words, issuers could implement the tobacco use surcharge in the individual market WITHOUT having to offer wellness programs." [emphasis added] So if the tobacco use surcharge is implemented but no wellness program is offered, it appears that the smoker must either quit or pay the surcharge, says Banzhaf.
He notes that smoking cessation programs offered by employers have a very low participation and success rate unless employees are motivated by a strong incentive to quit. A concurrent plan to ban smoking in the workplace (in jurisdictions where it is still permitted), or one to continue to employ only nonsmokers, or one to impose a high surcharge on smokers, provides that added incentive.
But, without it, the success rate and the resulting savings in health care costs are likely to be very small. Simply being required to sit in the back of a darkened classroom, and listen to facilitators preach about the dangers of smoking, would provide little incentive to quit for most hard-core smokers, suggests Banzhaf.
The smoker surcharge has two purposes. First, it would help alleviate the current situation in which the great majority of Americans who are nonsmokers are nevertheless forced to absorb the huge costs smokers impose on our economy: an estimated $12,000 per smoking worker annually, or more than $200 billion each year.
In other words, if every smoking employee imposes added costs of $12,000 each and every year, that means that for the 4 out of 5 employees who are not smokers, there is about $2400 less available for better health coverage, higher salaries, or other benefits.
Second, smokers – the overwhelmingly majority of whom already would like to stop – will now have a powerful and immediate incentive to quit.
“For all too many smokers, the incentive to quit today is only a statistical risk of death, disability, or ill health a long time in the future.""
Since people tend to respond much better to immediate incentives – like avoiding a 50% surcharge on their health insurance premium – this new requirement would give many of them the added incentive they need to successfully quit -- thereby saving taxpayers billions in health care dollars and other unnecessary expenses," argues Banzhaf.
JOHN F. BANZHAF III, B.S.E.E., J.D., Sc.D.
Professor of Public Interest Law
George Washington University Law School,
FAMRI Dr. William Cahan Distinguished Professor,
Fellow, World Technology Network,
Founder, Action on Smoking and Health (ASH)
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Washington, DC 20052, USA
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