Written by Akira Robinson, GlobalData's Head of Healthcare Consulting.
Recently, the Associated Press released an article about insurance premium penalties for smokers that are covered in the Patient Protection and Affordable Care Act. The penalty can be up to 50% more than non-smokers pay for coverage, and it can be reduced or eliminated if the smoker participates in a smoking cessation program. What’s more, government tax credits cannot be used to cover the premium. Since the article was published, the national press, local press, bloggers, and other commentators have had much to say. There is an uproar among those who seem thoroughly convinced that any penalty represents the impending doom of America’s freedoms, while others are focused more on whether or not this “smokers” penalty will actually convince smokers to quit.
Some have commented that smokers shouldn’t be charged a penalty by the government because their intrinsic penalty is in fact an early death, and dying earlier means that the smoker will tax the healthcare system for a shorter-than-average period of time even if they do use the system more. Let’s apply a bit of logic here: if a smoker will die earlier and pay less, then wouldn’t it follow that a non-smoker should pay more since they will be hanging around, living longer, and taxing the healthcare system longer than a smoker will? Such a concept is not only tough to defend, however, but would also be practically impossible to realistically implement.