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Penalty on Smokers Can Spell Higher Premiums under Health Overhaul

Legislator planning law to limit penalty in California

A little-known provision in the Affordable Care Act permits insurers to charge higher premiums to smokers. (Dave Whelan: Flickr)

A little-known provision in the Affordable Care Act permits insurers to charge higher premiums to smokers. (Dave Whelan: Flickr)

WASHINGTON (AP) Millions of smokers could be priced out of health insurance because of tobacco penalties in President Barack Obama’s health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.

The Affordable Care Act — also known as “Obamacare” — allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1.

For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.

For a 55-year-old smoker, the penalty could reach nearly $4,250 a year.
Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration. But older smokers could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.

Workers covered on the job would be able to avoid tobacco penalties by joining smoking cessation programs, because employer plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually. Continue reading