November 14, 2013

What's happening with charging smokers extra under Obamacare?

I was noticing this in an old post:
The Affordable Care Act... allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting [Jan. 2014]. For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.
At the time, I wondered about picking only on smokers and also whether this sort of targeting would move on to other sinners in the Religion of Health.

But now I'm just wondering who will admit to smoking? When they're fiddling around on a website that's known to be a disaster and they see they'll pay thousands more if they check "yes" for smoking, are they really going to resist switching to "no"?

The whole system was built on a lie — IYLYPYCKYP — and the system provokes and antagonizes people who are being trusted to be truthful. And you know smokers are rebels.

ADDED: That James O'Keefe Project Veritas video has Obamacare "navigators" advising the undercover investigator to lie about smoking: "You lie because your premiums will be higher... Don’t tell them that.... I always lie on mine."

56 comments:

cubanbob said...

Why only smokers? What about any high risk activity?
Promiscuity leads to STD's and unwanted pregnancies. Charge them more! Excessive exercising leads to joint damage. Charge them more! Listen to music too loudly leads to hearing loss. Charge them more! The list is rather extensive. Charge them all more! it's only fair.

Martha said...

There are tests available that measure nicotine metabolites in the urine. My husband's employer -- a medical clinic/hospital -- currently tests employees for smoking and if positive, insurance premium for the insurance offered to the employee is increased significantly.

Fritz said...

Who gets AIDS? Is homosexuality a valid reason for increasing insurance costs?

Henry said...

How about stunt doubles? Are they charged extra?

The Drill SGT said...

Fritz said...
Who gets AIDS?


Who gets STDs?, Is being young and single and on Birth control, reason to raise your rates?

Just askin...

seriously though, the entire premise of Obamacare at the actuarial level was moving away from risk based pricing and toward 'community pricing' and no pre-existing conditions exclusions.

singling out smokers is an outlier to that intent.

MadisonMan said...

This is a naive question.

Start at an insurance premium valid for everyone. Reduce it if things aren't done. Don't smoke? Save money! Can't procreate? Save money!

Why is the Govt only interested in raising rates, not cutting them? (That was the naive question)

Barry Dauphin said...

Now that Mile Bloomberg's term as mayor of NYC is almost over, perhaps he can be appointed Obamacare czar to "fix" everything. The Big Gulp premium.

Herb said...

lie say you dont smoke, end up in the hospital with any one of many smoking caused diseases and if the insurance company figures out you were a life long smoker i could see them denying coverage because you lied on your application. I was on the jury in a similar case and the insurance company won.

Left Bank of the Charles said...

Oh those lying smokers, and the President may be one of them.

Left Bank of the Charles said...

Oh those lying smokers, and the President may be one of them.

JHapp said...

The dishonest have always lied to get reduced premiums.

EDH said...

"IYLYPYCKYP"

God damn Russian communists!

alan markus said...

I'm sure that if the Obamacare computer system ever gets working right, it will be capable of accessing the digital medical record database.

Bill, Republic of Texas said...

The Drill SGT said.

seriously though, the entire premise of Obamacare at the actuarial level was moving away from risk based pricing and toward 'community pricing' and no pre-existing conditions exclusions.

singling out smokers is an outlier to that intent.

11/14/13, 8:50 AM

I agree somewhat. It is the end if risk based practices but the beginning of politically favored or disfavored practices.

RecChief said...

there are still some sins in leftism

Tom Gallagher said...

I think you meant "IYLYPYCKYPP"; you forgot the unequivocal Period at the end.

Matthew Sablan said...

Smokers are an acceptable target, that's why they're targeted.

Rumpletweezer said...

Does anyone have a moral obligation to tell the truth to a person or institution that consistently lies to him?

Matthew Sablan said...

"Does anyone have a moral obligation to tell the truth to a person or institution that consistently lies to him?"

-- Err... yes? The threshold to make lying morally acceptable is a lot higher than "Billy lied to me."

Carol said...

The dishonest have always lied to get reduced premiums.

The entire contract can be voided for fraud, in that case.

Brian said...

Martha and Herb hint at the real issue: this is the mechanism by which the Obamacare bureaucracy will force its way into your medical records. Not your billing records, mind you, but actual medical information you thought you provided to your doctor in confidence.

It's like a hook for a debugger.

Peter said...

Herb wrote, "ie say you dont smoke, end up in the hospital with any one of many smoking caused diseases and if the insurance company figures out you were a life long smoker i could see them denying coverage because you lied on your application. I was on the jury in a similar case and the insurance company won."


Individual health insurance contracts typically give the insurer the right to drop your coverage, and to recover any payments they've already made for you, if they discover a lie on your application. Of course, they're not going to go looking if you're not costing them much money- it's just that when you do start to submit large claims they will assign a reviewer to go over your application with the intent to find anything and everything that can be used to deny you further coverage.

SO, up until now that has been the risk: if you put a discoverable lie on a health insurance application then you would have coverage right up until the time you really need it- then it just goes away.

But, is this different under Obamacare? I don't know. Like everyone else, I haven't read through this 2,000 page monster of a bill.
_________________________________________

As for penalizing people for risky behaviors- well, really, I don't much care what risks you take with your health- unless I have to pay for your medical care. Then I start to care a great deal.

Which is to say, this sort of intrusiveness should be considered as just one of the costs (side effects?) that will inevitably result from socializing medical costs- everything (including your unhealthy habits and/or risky behaviors) become political.

Levi Starks said...

There is a fine line between health risking behaviors that are voluntary, and involuntary,
Here's an Idea, How about if we force people who show intentional disregard for their health to pay extra for both themselves, and those born with genetic predisposition to health problems.
And leave the rest of us alone.

AustinRoth said...

Anyone who doesn't think that the government will use this power as a coercion to enforce behavioral and other orthodoxies is a delusional fool.

AustinRoth said...

Peter said "Individual health insurance contracts typically give the insurer the right to drop your coverage, and to recover any payments they've already made for you, if they discover a lie on your application."

Perhaps all one has to do is claim that they are a pathological liar, claim it is a per-existing mental health issue, and ta-dah!, coverage is guaranteed.

William said...

Why is cigarette smoking more sinful, i.e. taxable, than heavy drinking or overeating. Playing high school football also has long term health risks.....Nobody ever missed a mortgage payment or beat their wife because of smoking. As vices go, smoking offers a stately, dignified route to hell. It has been absurdly over demonized.

Jane said...

Are the insurers charging a flat 50% more, or are they charging the actuarial cost of insurance for a smoker vs. the average nonsmoker, and it just happens that at older ages (when the emphysema, lung cancer, etc.) kick in, this is a huge difference? Inquiring minds want to know.

rcommal said...

If I recall correctly, in addition to the up-to-50% surcharge permitted to be charged to smokers, the law prohibits using the federal subsidy available to lower income folks from being used to offset that surcharge. In other words, the amount of the surcharge can't be included in the determination whether the cost of a premium triggers eligibility for the federal subsidy. Please, if my understanding is wrong, someone correct me.

It is interesting that similar provisions do not apply, so far as I understand it anyway, to drug addicts, alcoholics and so forth. Why the distinction? And yet, doesn't the law provide for coverage for rehab and so forth.

I also wonder if using a patch, nicotine gum, or e-cigs counts as being a smoker for ACA premium surcharge purposes. If so, why so?

Michelle Dulak Thomson said...

Martha,

Screening for nicotine metabolites will catch not just smokers, but people who have stopped smoking but used other nicotine delivery systems (patches, Nicorette, e-cigs) to do so.

So far as I know, the major danger from smoking -- the cancer-and-emphysema-causing element -- isn't nicotine, but all the other crap in the smoke. The trouble is that the physical addiction is to nicotine, with a side order of psychological addiction to the physical gestures of a smoker (this is why e-cigs took off so rapidly).

Admittedly, quitting smoking after having had a heavy habit for a long time isn't going to do much about your risk of lung trouble; the damage is likely already done. Still, some distinction ought to be made between those who still smoke, and those who don't, yet have nicotine in their system anyway because that's how they managed to quit.

rcommal said...

According to the whitehouse.gov:

"The ACA includes substance use disorders as one of the ten elements of essential health benefits. This means that all health insurance sold on Health Insurance Exchanges or provided by Medicaid to certain newly eligible adults starting in 2014 must include services for substance use disorders."

I guess nicotine addiction doesn't count. Or, is a premium surcharge also allowed for other substance abuses? Interesting.

Michelle Dulak Thomson said...

rcommal,

If I recall correctly, in addition to the up-to-50% surcharge permitted to be charged to smokers, the law prohibits using the federal subsidy available to lower income folks from being used to offset that surcharge.

If true, that's ... unfair. It's bad enough that our first reaction to a product that's supposed to be evil because it's almost impossible to stop using it is to tax the bejeezus out of it. (Talk about a captive market!)

To the extent that tobacco taxes work to reduce smoking, they put governments in the same fix that gas taxes are putting them in now: If your tax, supposedly meant to alter behavior, actually does alter it, then your revenue stream dries up. If you try to recoup by raising the tax, it just dries up faster. Hence all the proposals to make every car have a GPS device on it, so that we can tax miles rather than gasoline. (And incidentally know exactly where your car is 24/7. But no one in government would ever misuse those data, right? Right?)

But the other unfairness is that smoking is concentrated among the poor and the lower middle class, so we're going to clobber them with a surcharge, and ignore it when it comes time to calculate subsidies? Cold, man.

Obligatory disclosure: I don't smoke, and never have.

Drago said...

Obama about to speak and magically make some parts of the ACA (which the left was telling us literally just moments and days ago was sacrosanct) suddenly not so sacrosanct.

Remember, last month Ted Cruz was a nazi, a villain, someone who wanted people to die, a clown and a thousand other things because he was demanding that obama care provisions be delayed.

This week? Dems and obama determine that delays of some provisions are warranted.

The likely response from the left?

Rainbows and unicorns emanating from the genius and humanitarian impulses of teh One.

Ann Althouse said...

"The entire contract can be voided for fraud, in that case."

Calculate that risk.

Seeing Red said...

If the doctor sends your medical records to the Fed, they get a higher reimbursement.

How many people know that?

The GOP should start drip drip dripping this stuff.

And remind everyone that we really should read a bill before passing it.

Seeing Red said...

And there's a nifty little provision if you have a baby and you're under 21. Like HOME VISITS.

This thing also waives HIPPA under some circumstances.

elkh1 said...

Are you a 3.8 percenter?

If you are single with an adjusted gross income of $200,000 or file jointly with an income of $250,000 or more, you may be impacted. Once you sell your home, any profits over the first $500,000 are already subject to a capital gains tax. And now those profits will have an additional 3.8% tax to fund Obamacare.

The 3.8% tax is not limited to selling homes It definitely applies to selling stocks for those that meet the dollar thresholds.

rehajm said...

So we're only delaying implementation of ACA for another year, until after the election.

Does he not know there's always another election?

Martha said...

Seeing Red said...
If the doctor sends your medical records to the Fed, they get a higher reimbursement.

It is worse, much worse. If the doctor does not ask the questions mandated by the government and record the answers in the digital medical record for posterity and inquiring eyes, the doctor is not reimbursed.

Michael said...

It does not matter since pre-existing conditions cannot be a reason for being denied coverage. Lie now and so what if you are "caught" down the line? You took up smoking. So what

mccullough said...

Let's up the stakes. If you don't quit smoking, you don't get Medicaid.

Smilin' Jack said...

And you know smokers are rebels.

People start smoking because they see people around them smoking and they want desperately to fit in and be like everyone else. They're pathetic conformists. And they stink.

n.n said...
This comment has been removed by the author.
n.n said...

Integrity is inversely proportional to proximity.

Jim Howard said...

The President's supporters say that it's ok that the ACA website offers no expectation of privacy, because the ACA doesn't ask health related questions, and therefore HIPPA doesn't apply.

Yet asking about smoking is clearly a health related question.

I don't understand how they can both ask a health related personal question and yet claim that HIPPA doesn't apply.

Jason said...

Traditionally, the agent acted as a field underwriter. Insurance was sold face to face in the individual market, at the office or the kitchen table. Agents would make a note if the applicant smelled like tobacco, had yellow fingernails, if there was an ashtray on the coffee table, or if they were so fat they had to put their belt on with a boomerang.

It was an important part of the fraud prevention process and was necessary to price risk appropriately in the individual market, where adverse selection is at its most dangerous.

Website selling eliminates the agent... A valuable bullshit detector.

Jason said...

Traditionally, the agent acted as a field underwriter. Insurance was sold face to face in the individual market, at the office or the kitchen table. Agents would make a note if the applicant smelled like tobacco, had yellow fingernails, if there was an ashtray on the coffee table, or if they were so fat they had to put their belt on with a boomerang.

It was an important part of the fraud prevention process and was necessary to price risk appropriately in the individual market, where adverse selection is at its most dangerous.

Website selling eliminates the agent... A valuable bullshit detector.

FullMoon said...

Smilin' Jack said...

And you know smokers are rebels.

People start smoking because they see people around them smoking and they want desperately to fit in and be like everyone else. They're pathetic conformists. And they stink.


So, Jack, the ex was a smoker. eh?

Darrell said...

The best study on the cost of smoking and lifetime health care cost was done by the Canadians--and is so thorough that it unlikely ever to be repeated. It found that costs for smokers are considerably lower--more than 33%.
They should charge MORE for nonsmokers, but go ahead and play your little games based on "intuition."

Alexander said...

Great idea, Darrell. Yes, let's have the government give a mandated incentive to those who statistically speaking kill themselves off before social security kicks in.

That's a society worth making!

lgv said...

One again, the Drill SGT hits the nail on the head. Singling out smokers goes against the whole model. Yet, it is a political decision.

The key is to not sign up until you get the smoking related illness. You didn't pay the 50% premium, yet you get your coverage because it covers pre-existing conditions.

jr565 said...

Do you smoke?
Does it cost more if I do?
Yes.
Then, No. I don't smoke.

verification complete.

jr565 said...

What about poor smokers? they get the subsidy normally. Do they pay regular price?
What if they can't pay, because they're, like, poor and stuff?
doesn't Obama want poor people to have insurance?
And what if they have lung cancer because of smoking. Is that a precondition. I thought that the insurance companies can't deny people with preconditions.

jr565 said...

Screening for nicotine metabolites will catch not just smokers, but people who have stopped smoking but used other nicotine delivery systems (patches, Nicorette, e-cigs) to do so.

how are they going to test for this if you're applying on a website?

jr565 said...

herb wrote:
lie say you dont smoke, end up in the hospital with any one of many smoking caused diseases and if the insurance company figures out you were a life long smoker i could see them denying coverage because you lied on your application. I was on the jury in a similar case and the insurance company won.


But I thought Obamacare said insurance companies couldn't deny you coverage based on preconditions?

Hammond X Gritzkofe said...

Sometimes being fair means people at higher risk cannot be charged more.

Sometimes being fair means people at higher risk must be charged more.

Sometimes it's not easy to decide which way is fair. That's why our Government hires people to decide for us.

Thanks.

Theranter said...

Smoking status is already in your EHR, best not to lie.

I have it on decent authority it is being used as a placemarker for the other conditions to be added at the whim of HHS. And let me guess what the next will be, hmm, gun ownership, then body mass, followed by alcohol consumption...

Smoking is just the first of many "nudges" to inflate the premiums in an attempt modify behavior and remove vast amounts of $ from the economy that are then laundered through the govt.