Insurance companies, not the state, would decide how to deal with smokers in the new insurance marketplace mandated by the federal health-care law under a recommendation discussed Friday.
The health-care overhaul championed by President Barack Obama allows states to apply higher premiums to smokers, but doesn’t require it.
Insurance executives and consumer advocates on the insurance exchange’s Plan Management Advisory Committee both questioned the wisdom of extra costs for smokers.
The insurance executives on the panel argued that competition works best in dealing with smokers among the estimated 211,000 Arkansans expected to sign up for coverage on the exchange.
Some insurers mightcharge a higher premium for smokers if the companies don’t want to attract the higher health-risk group to their plans. Others might choose to reward smokers who quit with lower premiums or by waiving co-pays, the executives said.
The advisory panel recommended that the state take no action on smokingrelated fees. The insurance exchange’s steering committee will discuss the issue later this month. Insurance Commissioner Jay Bradford will make the final call.
Under the federal Affordable Care Act, states are creating insurance exchanges that will offer federally subsidized insurance to consumers who annually earn between $11,170 and $44,680 when enrollment begins in October. Coverage begins in January 2014.
But higher premiums for tobacco users wouldn’t be covered by federal subsidies. Those dollars would be paid entirely by the individual, said Zane Chrisman, a plan management specialist for the exchange.
A report by an actuarial consulting firm estimated that between 25 percent and 30 percent of Arkansans smoke, with the highest rates occurring in northeast Arkansas. The study also concluded that a smoking surcharge would leave more state residents uninsured.
Under the AffordableCare Act, insurance companies can’t easily catch smokers cheating or cancel their coverage if they light up.
Executives from two of the state’s largest health insurers, Qualchoice and Arkansas Blue Cross and Blue Shield agreed that almost everyone who smokes will fib to insurers about their habit.
“We won’t have anyone in the state who smokes,” said Cal Kellogg, chief strategy officer for Blue Cross and Blue Shield.
Other planners worried that higher premiums would cause poorer Arkansans to be unable to afford health coverage on the exchange. A 2009 study by the Centers for Disease Control and Prevention found that people living below the poverty line smoked at a higher rate than those above it.
Rich Huddleston, executive director for Arkansas Advocates for Children and Families, said that children are much less likely to have health coverage if their parents are uninsured.
Qualchoice of Arkansas vice president for compliance, Jim Couch, said federal law hasn’t required insurance companies to try to reduce smoking.
“But guess what? We do it anyway because there are obvious benefits to us,” Couch said.
The premium increases would apply to all types of tobacco users, including dippers, chewers and cigar aficionados.
Northwest Arkansas, Pages 9 on 02/09/2013