14 and Then 24 Million Will Lose Health Insurance Because of 15%

WASHINGTON - March 14, 2017 - PRLog -- The CBO has determined that the Republican replacement for Obamacare would increase the number of uninsured Americans - by 14 million by 2018, and 24 million by 2026 - raise premiums for many Americans, and seriously impact low-income constituents and seniors in nursing homes.

        It is already drawing very strong opposition, with many conservatives complaining about the cost, and many on the other side concerned that there will not be enough money to cover millions of American who might not be able to afford it.

        But many of these problems could be addressed if the replacement simply incorporated personal responsibility into the proposal; a step which could address not only how to pay for healthcare for millions who cannot afford it, but also how to actually reduce - not just shift through taxes and premiums - the ever-growing cost of health care.

        The entire cost of Obamacare could be covered if a simple change were made, says public interest law professor John Banzhaf.  Banzhaf not only provided the simple answer and analysis, but also helped persuade the National Association of Insurance Commissioners [NAIC] to adopt and propose it, and the U.S. government to approve it, twice, before the adoption of Obamacare.

        The CBO estimated that Obamacare would cost about just under $140 billion per year, most of it paid, directly or indirectly, by working Americans.  But this is dwarfed by the health care costs imposed on everyone from one major high-risk activity which only a small percentage of American adults (about 15%) continue to engage in: smoking.

        The American Lung Association estimates that smoking costs the American economy about $322 billion a year.  This includes over $175 billion in direct medical care for adults, but does not include the huge increased indirect costs such has higher numbers of complications from surgery, delayed healing, etc.

        Most of this alarming cost - much more than twice the entire cost of Obamacare - is borne by the great majority of nonsmokers, in the form of higher taxes as well as ever-escalating health care costs (in the form of higher premiums, changing deductibles, etc.).

        So reducing smoking could cover the entire cost of any new health plan, without using taxers' money, or imposing higher health insurance rates on the great majority of Americans who do not smoke.

         One way to do this would be to introduce true personal responsibility into health care reform by permitting insurers to have smokers bear their fair share of the costs they now force upon others.

        Even if this did not help persuade a single smoker to quit, it would be fairer than continuing to impose those unnecessary costs on the great majority of Americans who do not smoke.

        It could be done by simply permitting health insurance companies to do what life insurance (and some car and home insurance) companies have long done without any serious objections - charge proportionately higher rates for these who smoke.

        After all, the core principle of insurance is for persons to share the costs of foreseeable risks with those who are similarly situated.  Thus, those who drive recklessly pay more for automobile insurance; those who fail to install smoke detectors pay more for fire insurance, and those who smoke have long paid more for life insurance.  Why not do the same for health insurance?

        Moreover, dozens of studies have shown that providing smokers with a strong financial incentive to quit is generally far more effective than spending hundreds of millions of taxpayer dollars annually on anti-smoking messages, warnings on cigarette packs and in cigarette ads, etc.

        Usually this had been done by dramatically increasing taxes on tobacco products.  But studies show that, in addition to requiring smokers to reimburse governments for money spent covering their added health care and other costs, higher cigarette taxes help persuade millions of smokers to quit.

        So higher cigarette taxes are a win win win for everyone:  the financial burdens on nonsmokers are reduced by the increased revenue from the taxes (even allowing for the reduction in the number of smokers); health care costs are slashed when millions of smokers - the overwhelming majority of whom already want to quit, but often lack an immediate incentive - are helped to quit; and smokers and their families benefit because of longer life, lower health care costs, savings from no longer buying cigarettes, etc.

        Indeed, after many health insurance companies were encouraged to begin charging smokers more by the passage of Obamacare - which permitted a health insurance surcharge of up to 50% on smokers - the Wall Street Journal, the British Medical Journal, and others reported that the smoker surcharge could slash smoking rates by one half.   But Obamacare didn't originate the principle of a smoker surcharge.  It was developed by Professor Banzhaf.

        Banzhaf was also instrumental in having it officially approved by the federal government in rulings that insurance companies could charge smokers as much more as could be justified by actuarial data.  In many cases, this was far more than the 50% Obamacare permitted, so the impact was limited.

        Moreover, in Obamacare regulations the government subsequently adopted, a smoker often could easily avoid any increased insurance rates simply by participating in a smoking-reduction program.

        In this way, says Banzhaf, a person could continue to smoke, and impose its huge costs of other workers, simply by watching slides about the dangers of smoking.

        A final problem with this tiny bit of personal responsibility incorporated into Obamacare was that it permitted individual states to nullify the surcharge - shielding smokers from having to pay their fair share -  by outlawing any higher payments for the tiny minority who continue to smoke.


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