Obamacare's 50% Smoker Surcharge Causing Confusion, Controversy

WASHINGTON - July 8, 2013 - PRLog -- WASHINGTON, D.C. (July 8, 2013): The 50% surcharge on smokers under Obamacare seems to be causing some confusion and even controversy, as reflected in the Wall Street Journal and other publications, but it's all rather simple and fair, says public interest law professor John Banzhaf, who first helped develop the concept of differential health insurance premiums, and got it included for smokers under Obamacare.

While some wonder why the same rationale, and the same surcharge, shouldn't apply to obesity, Banzhaf notes that the federal government has classified obesity as a “health status,” one sometimes protected under the Americans With Disabilities Act [ADA], and the American Medical Association [AMA] classifies obesity as a “disease.”

None of this is true of smoking, which is classified by the government as only a “behavior” – the reason why smokers (but not the obese) can be charged far more, even if an employer can't or doesn't want to meet the many burdens of establishing and maintaining a formal wellness program meeting federal requirements.

Also, while virtually all life insurance policies have different rates for smokers and nonsmokers because of the huge and clearly established health risks, few if any have higher rates for the obese, alcoholics, skiers, etc. – or any of the other categories or factors critics raise when attacking the smoker surcharge.

To those who argue that the federal government is now making decisions regarding individual health care – becoming a "national nanny" – Banzhaf notes that the decisions to charge smokers more are being made by the individual companies, based upon their own actuarial experience and calculations, and not by bureaucrats. That’s the way it should be under a free enterprise system, he argues.

What the Obamacare provision does do is to simply permit but not require companies to impose personal responsibility on people for their own health, a key concept endorsed by many Republicans as well as Democrats, since it forces smokers to pay more of the health insurance costs their choices create.

Indeed, since each smoking worker can impose added unnecessary costs of $12,000 a year, asking them to pay 50% more – an average of about $5,000/yr - seems to be both fair and reasonable.

Unlike other higher rates under Obamacare for factors like age, smoking is something people can change. Quitting, and thus eliminating many of the diseases smoking causes, will save more money than simply using electronic medical records, evidence based treatments, etc., and other improved procedures also provided for under Obamacare.

Some argue that smokers already pay for the added costs they impose on the health care system by paying cigarette taxes and by "dying earlier." But tobacco taxes make up only a small fraction of the total costs of smoking to the American economy – estimated to be about $300 billion annually – and cigarette taxes go to governments, and not to employers and insurance companies which now have to pay the costs.

Dying earlier is such a fallacious argument that even Philip Morris was forced to apologize for making it, and any savings in Medicare and Social Security from premature smoker deaths likewise save money for the government, and not the companies being pressured to impose the higher rates on smokers.

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)
2000 H Street, NW
Washington, DC 20052, USA
(202) 994-7229 // (703) 527-8418
http://banzhaf.net/ @profbanzhaf