The board charged with implementing federal health care reforms in the District has voted to prohibit insurance companies from charging higher premiums to cigarette smokers, adding the city to a handful of states rejecting such surcharges because of the effect they have on poor families who are more likely to smoke.
The D.C. Health Benefit Exchange executive board voted Monday to join Rhode Island, Vermont and Massachusetts in eliminating smoking premiums in their health care exchanges.
Dr. Mohammad N. Akhter, chairman of the city’s health exchange board, said the costs of the surcharge could be prohibitive for poor families. The Affordable Care Act allows states to impose up to a 50 percent surcharge for people who have used tobacco at least four times a week over the last six months.
A June 2012 study by the Institute for Health Policy Solutions estimated that the largest effect would be on older couples whose earnings were at 150 percent of the federal poverty line. If subjected to the maximum surcharge, a couple older than 60 years old who both smoke would face a premium equaling 48 percent of their total income and 143 percent of their income above the poverty level.
“That’s basically unaffordable,” Dr. Akhter said.
An estimated 20.8 percent of D.C. adults smoke regularly, compared to a national median of 21.2 percent, according to 2011 statistics from the Centers for Disease Control and Prevention. But smoking rates among black residents in the District were much higher, at 30.8 percent.
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States have the option to lower or eliminate the surcharge, and Dr. Akhter said board members considered dropping the surcharge from 50 percent to 20 percent or applying the surcharge at 400 percent of the federal poverty level. In the end, the seven-member board voted 5-1 with one member absent to eliminate it entirely.
“We didn’t really want to segment the population too much,” he said.
The purpose of the surcharge was to cover the costs of medical treatment for smoking-related diseases amid concerns that without it premiums for the general population will rise.
Dr. Akhter said the goal of the exchange is to serve as many people as possible, so he did not want to discourage people from buying insurance. He said that the best way to quit smoking is with medical help, and that if people either don’t get insurance or lie about their smoking habits they could be cutting themselves off from treatment options.
Tobacco manufacturer Altria Group Inc., which owns Philip Morris USA Inc., has lobbied against the surcharge, as have the American Lung Association and the American Cancer Society.
David Woodmansee, associate director of state and local campaigns for the American Cancer Society, applauded the move.
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“Just because people have become addicted to a terrible drug is not a reason to turn our back on them in providing health care,” he said, noting that low-income people are more likely to smoke.
“This is the population that needs health care the most,” he said. “We are antismoking for sure, but we are not antismoker.”
Mr. Woodmansee said that, in the long run, providing smoking-cessation treatment options that are covered by insurance would lead to more people quitting and reduce premiums for everyone. He predicted that four or five other states in coming weeks might take action similar to that in the District.
Before the Affordable Care Act, five states prohibited smoking premium for individuals and 13 states banned it in small group plans, Mr. Woodmansee said.
The city’s exchange — a Web-based program, akin to the Expedia travel website, with side-by-side comparisons of health plans taking the place of flights or hotel rooms — is set to be operational by October. The board decided last October that the exchange would be the sole health insurance marketplace for individuals and small employers — defined as companies with 50 or fewer workers. The city’s exchange is projected to have more than 100,000 customers.