Should Smokers Pay More for Health Insurance?

Smoking insurance costsLast week, Dallas County in Texas joined the growing ranks of employers that charge employees who smoke a higher monthly health insurance premium than employees who don't light up. Beginning Jan. 1, smokers employed by the county will pay an additional $50 per month per person for not only the employee, but also any family member who smokes and is covered by the county's health insurance plan. The county estimates that this "non-smokers' discount" will reduce its medical costs by $500,000 as early as next year.

The idea of increasing insurance premiums on smokers has been around since the 1980s, when the National Association of Insurance Commissioners, the standard-setting organization representing the chief insurance regulators from the 50 states, calculated that roughly 60% to 80% of all of the health care expenses incurred in the United States were attributable to things that people could potentially control, such as failing to wear a seat belt, engaging in unsafe sex, ingesting drugs or alcohol, driving drunk, overeating or under-exercising, and smoking. Given that only some portion of the population was involved in these activities, but that everyone was essentially picking up the tab for the associated medical care, the NAIC wondered if it made sense to require people who made less healthy choices to pay more than those who didn't.

To support this idea, researchers considered the standards around life insurance. By the 1980s, smokers were already paying more for life insurance than their nonsmoking counterparts. Why not apply that to health insurance, so long as the increased rates were only employed under appropriate conditions?

Roughly 20% of Americans smoke. "If you look at the number of people who are smokers," argues John Banzhaf, a professor of public interest law at George Washington University Law School and also the retired founder of the nonprofit antismoking organization Action on Smoking and Health, "versus the great majority who aren't, it's much fairer to put the costs on the backs of those who cause them rather than on the backs of the great majority who don't smoke."

The Price We All Pay

The Centers for Disease Control and Prevention estimate that smoking costs the U.S. nearly $200 billion annually, and that an employee who smokes costs the employer 18% more than a nonsmoker. It's facts like these that Banzhaf and other supporters point to when asserting that a tiered premium structure is a reasonable way to hold Americans accountable for their actions.

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According to ASH
, "Such a smoker surcharge would be consistent with President Obama's recent remarks [that] 'we've got to have the American people doing something about their own [health] care.' It would also put into practice the policy of HHS Secretary Kathleen Sebelius, [that] 'personal responsibility extends to lifestyle; that in order to have a healthier America, a more productive America, we need to make some basic changes.' ... If adults should have the choice
whether or not to smoke, it's high time they be required to accept at least some personal responsibility for the financial and other consequences of their choice to others."

The idea has gained traction. Today, almost a dozen state governments charge higher health insurance premiums to employees who smoke. Companies are also jumping aboard. PepsiCo (PEP), Macy's (M) and Gannett (GCI) charge smokers a higher premium, while others, including Humana (HUM), Union Pacific (UNP) and Scotts Miracle-Gro (SMG) simply outright refuse to hire smokers.

But for every supporter, there is a detractor. "Right now, there is not enough evidence to support increasing the cost of health insurance, in terms of its impact on smokers quitting," says Dr. Kurt M. Ribisl, associate professor at the UNC Gillings School of Global Public Health. "I am concerned when cities and states pursue untested and punitive approaches when they have not yet done what we already know is effective like raising cigarette taxes, and banning smoking in all workplaces, restaurants and bars."

Ribisl is also concerned that "raising the cost of health insurance may get some smokers to quit, but it may backfire by making health insurance more costly and less available. This can push smokers out of the health care system when they need easy access to quit-smoking medications and doctors who will tell them to quit."

Tiered Premiums Feel Fair ... If You Don't Smoke

Despite these concerns, the Obama administration has included the tiered health care premiums in its new health care legislation, allowing employers to raise smokers' health care costs by over 100%. Supporters like Banzhaf argue that the increased fees could not only motivate smokers to quit, but will also generate revenue for the federal government without plunging into the onerous challenge of raising taxes.

Which sounds great. But to Ribisl's point, there are other strategies known to work while this one remains unproven. We need data to confirm that such a rate increase would affect change.

The other complicating factor here remains the question of the degree to which smoking is a behavior individuals can control. On the surface, it looks like one: We aren't born smoking. Rather, people opt to pick up that first cigarette. And this is the argument behind the tiered premiums. If you choose to engage in this behavior, you should take financial responsibility for it. In a similar way, the premiums on car insurance, and fire insurance on our homes, vary depending on whether or not we chose to take certain precautions.

But smoking is addictive, which is why so many who people try to quit fail. That very addictiveness muddies the waters around the idea that it's reasonable to penalize people for the behavior -- for actions they may no longer be able to effectively control. For similar reasons, many Americans are uncomfortable with the idea of applying a tiered insurance premium system based on weight. We recognize that obesity isn't just about eating less, but also about a person's metabolism and genes, areas over which we don't have much control.

I believe strongly in personal responsibility, but I also know that not everyone has the same intrinsic ability to overcome an addictive habit. It's not simply about willpower. It may also be about the person's physical response. Either way, I know this: I don't smoke. And I wish others wouldn't -- for my sake, but also for theirs.

Loren Berlin is a reporter with the AOL Huffington Post Media Group. She can be reached at, on Twitter at @LorenBerlin, and on Facebook.

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