Smokers Who Lie Cause Higher Health Costs for Everyone Else, Report Finds

Smoking rates reported by insurers serving the ACA exchanges were consistently lower than findings from the CDC, suggesting that some are not being honest to avoid surcharges.

Smokers who lie about their habit are avoiding surcharges in many states, forcing up premiums for others who buy health coverage on the insurance exchanges, a new report finds.

Kaiser Health News reported Wednesday the smokers are apparently lying to insurers about their status, unless by some quirk only smokers are not buying health coverage under the Affordable Care Act (ACA).

The ACA permits states to charge smokers up to 50% more than nonsmokers when they bought coverage on the exchanges. Surcharges in some states are lower, and 8 states plus the District of Columbia don’t allow surcharges at all.

CDC data on smoking status by state, which is collected by health researchers, finds much higher rates in every state than insurers are reporting to CMS, according to the report. This suggests that smokers are not telling the truth when buying health coverage to avoid the surcharge.

The federal health law calls for surcharges if a person uses “any tobacco product on average 4 or more times per week in the past 6 months.” According to the report, about 7% of 5.1 million enrollees in states that have surcharges were affected.

States that bar surcharges include some with large populations, such as California, New York, and New Jersey.

A spokesman for Blue Cross of Idaho told KHN that the finding was “bothersome” because, “It means nonsmokers will pay more because smokers generally have higher healthcare costs that were supposed to be partly offset through the surcharge,” said Josh Jordan.

“A lack of people paying it means everyone else may pay more,” he said.

Smoking rates have plummeted over a 50-year period and are now at 17% of the US adult population, down from 21% a decade ago. However, rates vary by region and by socioeconomic status, with higher rates seen among the poor and in states that make up the Deep South.

Mississippi’s smoking rate is 25%, but the rate reported by those buying coverage on the exchanges is only 9%. Kentucky—long a haven for tobacco and with one of the nation’s highest rates of cancer death—has a smoking rate of 27%, but only 11% of those insured on the state-run exchange report using tobacco.

Even states with relatively little overall smoking still have some signs of fibbing. Utah’s CDC reported smoking rate is 10%, but level reported by those insured on the ACA exchange is only 4%.

Because CDC has found consistently that those at lower income levels are more likely to smoke, it makes little sense that smoking levels would be lower than statewide rates on the exchanges. After all, the ACA was designed to fill gaps for those who could not gain coverage through an employer or afford it on through the private individual market.

Right now, insurers who are covering ACA enrollees rely on self-reporting for smoking status. But there are other ways, such as blood or saliva tests, to determine whether someone is smoking. Some large employers use these methods to levy surcharges, but most rely on self-reporting, according to KHN.

Not everyone agrees that surcharges help encourage smokers to quit, and some think they only discourage people from seeking coverage. The American Lung Association takes this position: “Punitive measures like tobacco surcharges have not been proven effective in encouraging smokers to quit and reducing tobacco use.”