Obamacare may make health care unaffordable for smokers, thanks to a provision that allows insurance companies to charge them 50% higher premiums than non-smokers. While younger smokers may be given a lower penalty, the costs of this policy for the old are enormous:
Take a hypothetical 60-year-old smoker making $35,000 a year. Estimated premiums for coverage in the new private health insurance markets under Obama’s law would total $10,172. That person would be eligible for a tax credit that brings the cost down to $3,325.
But the smoking penalty could add $5,086 to the cost. And since federal tax credits can’t be used to offset the penalty, the smoker’s total cost for health insurance would be $8,411, or 24 percent of income. That’s considered unaffordable under the federal law.
Smoking is a bad business. We at VM have lost several close friends and family members to it throughout the years, and smoking-related illnesses are a significant drag on the healthcare system. We welcome any signs that smoking is still on the wane, but penalizing smokers in this draconian way seems a little odd. One of the founding principles of the administration’s approach to health care is to make insurance accessible for people with pre-existing conditions. If a physiological addiction to a life-threatening substance doesn’t qualify as a pre-existing condition we aren’t sure what does. There are many other lifestyle related diseases and many other addictions that create serious and expensive medical problems. Shouldn’t drug addicts also be penalized? The morbidly obese? Excessive consumers of alcohol? People who drive fast cars? Scuba divers? Gun owners?
The concept that access to health care should be independent of the traditional principle of insurance (the higher the risk the greater the cost) is the animating moral core of America’s health reform movement. This effort to reintroduce a risk based insurance principle affecting tens of millions of people seems odd, to say the least.
It also seems a bit unfair. If we just look at a cost benefit calculation, it may be that smokers by living shorter lives and therefore incurring fewer Medicare bills and getting less money from Social Security are already contributing towards a ‘fair share’ of the cost of their condition. Most of us will ultimately get sick and die of something very expensive; smokers do so roughly a decade earlier than most people. Shouldn’t those savings be factored into the costs being imposed on them?
We also wonder how the law will be enforced. Will the government send snoops into the homes of people who claim to have quit smoking? Will there be spot checks? Will poor, elderly, semi-literate men be prosecuted for the crime of lying about their smoking behavior in order to get health insurance?
We’ll see how it works, but ill-considered proposals like the smoking penalty are the tip of the iceberg; this system is deeply flawed, and the roll out is unlikely to bring us much joy.