Will the smoker surcharge make things worse?

I have always been a big fan of the mantra, “If you have a rule your aren’t enforcing, you are better off without the rule.”

Under a number of Federal regulations, you cannot discriminate against the disabled, those with HIV, the overweight, etc.  However, under the Health Care Reform laws, the one thing they CAN charge you more for is – smoking.   The big question on everyones lips as I do my presentations is “How are they going to enforce this?”  Turns out, enforcement may be too strong a term.

When applicants to the exchange apply, they will simply be asked the questions “Do you smoke” with no further verification.  This is kind of like the question “Is your employers coverage affordable” (without providing the definition), but thats another blog post.  Insurers are not allowed to rescind coverage if the member lies to them, although they can charge the “dishonest” member the surcharge retroactively.

Catching the dishonest smoker is a easy as getting doctors notes on their first claim, and the notes say “Reeve is a 57 year old smoking male.”  It is 8 months into the contract and I pay $300 a month;  now I get a bill for $1200 in retroactive premium and my premium goes up to $450 a month.  What will happen?   I am guessing, IMHO, I don’t pay the bill, and I cannot afford insurance, so now I am back on the uninsured roles – and now everyone is covering me when I get free care at the Emergency Room.

Of equal interest is this little fact – tax credits and plan subsidies cannot be used to pay the 50% surcharge.  So will this 50% surcharge be a hardship that makes the smoker not buy insurance because (now) they can’t afford it (again), or lie and hope to not get caught?  With the law requiring smoking cessation services to be part of the health insurance, whats the point if you make it harder to buy the insurance in the first place.

This is admittedly a hard call.  Smoking is a “voluntary activity” but the addiction is very hard to quit.   Smokers cost more to insure (as do drinkers, motorcycle racers, heroin addicts and the overweight) and so  some will say “we should help them, not charge them more,” while others believe “Why should I pay extra to cover their bad habit?”

Unfortunately this law doesn’t appear to take either road, instead it charges them more, makes for a messy enforcement, and probably reduces access in the short run.