A recent article in the Virginia Mercury caught our attention. It seems that Virginia Governor Glenn Youngkin supports legislation to eliminate higher premiums for tobacco users in the state. The practice of rating health insurance policies for tobacco use has been a contentious issue in recent years, and Governor Youngkin’s about face on this issue has reignited the debate surrounding this practice.
The Rationale for Higher Premiums for Tobacco Users
Insurance companies charge higher premiums for tobacco users because they are at a higher risk of developing serious health conditions, such as cancer, heart disease, and lung diseases. According to a study published in the National Library of Medicine, “Tobacco use is the largest cause of preventable illness in the United States.” As a result, insurers argue that higher premiums are necessary to offset the increased claims costs associated with providing coverage for tobacco users.
Rules and Regulations
Under the Affordable Care Act (ACA), health insurance companies are allowed to charge tobacco users up to 50% more for their premiums compared to non-tobacco users. However, this practice varies depending on the state, as some have implemented their own rules and regulations. The Kaiser Family Foundation notes that the federal government does not require states to allow insurers to charge higher premiums for tobacco users, and some states have opted to limit or prohibit these charges altogether.
Prevalence of Higher Premiums for Tobacco Users
Higher premiums for tobacco users are quite common in the United States. According to HealthCare.gov, tobacco use is one of the few factors that can cause premiums to vary within a given area. While some states have decided to limit or prohibit higher premiums for tobacco users, others have continued to allow insurers to charge more for this high-risk population.
A Healthcare Insider article reports that, as of 2021, 43 states allowed insurers to charge higher premiums for tobacco users. However, the actual surcharge varies greatly depending on the insurer and the state's regulations. Some states, such as California, New York, and Vermont, do not allow any tobacco surcharge, while others like Arkansas, Colorado, and Kentucky allow surcharges of less than 50% of the premium. In some cases, insurers may choose to implement a lower surcharge than the maximum allowed by state law, but this is ultimately up to the individual insurance company.
Potential Changes in the Future
The decision by Governor Youngkin to support the elimination of higher premiums for tobacco users in Virginia may prompt other states to reevaluate their policies on this issue. Proponents of the change argue that it will save money for all Virginians with insurance, regardless of their tobacco use, and improve access to therapeutic support for those who want to quit. This shift in policy could potentially spark a broader discussion about the fairness and effectiveness of charging higher premiums for tobacco users in other states as well.
A Continued Topic of Debate
The practice of rating health insurance policies for tobacco use remains a topic of debate, with some arguing that higher premiums are justified due to the increased health risks associated with tobacco use. However, others believe that these higher premiums can be counterproductive and may not effectively incentivize individuals to quit smoking. It’s unlikely that this is the last we’ll hear on this issue.