The Affordable Care Act brought dramatic changes to the individual and small group health insurance premiums still, the use of tobacco by a person can affect the price one pays for the health coverage. Although we did not have data from other years, the fact that our results were similar across the two years gives us confidence that pooling the data is a valid approach. All columns are derived from a single multinomial logit regression, and each column presents the relative risk ratios (RRR), comparing the risk of being in the insurance type of interest and being uninsured. Our models test the effect of the surcharge on enrollment and do not provide evidence of higher enrollment among nonusers. The federal law gives insurers the right to add up to 50 percent to the cost of individual health care coverage. Tobacco Users Pay Health Insurance Surcharges as per State and Federal Rules, Complete Overview on Buying Private Health Insurance Plan, Significant Differences between Public and Private Health Insurance Plan, Master the Tips to Shop for Health Insurance, Get personalized help related to Insurance Products, Service & Claims, Tips to Choose between Obamacare and Employer-sponsored Health Plans, Enrollment in Individual Health Plan is still possible after Ending of COVID SEP in the Most States, Free Health Insurance for Uninsured Americans with Stimulus Package. 83 votes, 182 comments. there is yet little evidence that insurance surcharges lead to changes in tobacco use. It was then decreased from 21 to 19 in 1963. Tech: Matt Latourelle Nathan Bingham Ryan Burch Kirsten Corrao Travis Eden Tate Kamish Margaret Kearney Joseph Sanchez. Further, smokers without insurance through an employer or public program were 9.0 percentage points less likely (P < .01) to enroll in a nongroup plan if they were subject to a tobacco surcharge. 7 13 for the purpose of these tobacco use surcharges, the definition of tobacco use is "the use of a tobacco product or products four or more times per week within no longer than the past 6. 15 Alternatively, a state may require that the tobacco use surcharge be calculated as a share of the consumer's subsidized premium (instead of from the unsubsidized price, as under the default rules). First, each March, participants respond to the Annual Social and Economic Supplement (CPSASEC), which includes detailed questions about the source and type of health insurance coverage as well as exhaustive income and employment questions. All models used CPSASEC weights, and standard errors are clustered at the state level. 27 Our final sample used pooled data from CPSASEC in 2015 and 2019 and included 106711 nonelderly adults. The plaintiffs are seeking a refund of all the tobacco surcharges collected by the employer since 2016. . September 29, 2021. Because the State Plan program does not use medical tests to detect nicotine usage, the amount of the tobacco surcharge can be as much as 50% of the total cost of employee-only health coverage. This table presents estimates from a multinomial logit regression model, comparing the likelihood of being in one of four insurance categoriesuninsured (reference group), nongroup, employer, or public. Nonetheless, this study shows that lower surcharges were associated with higher enrollment in nongroup plans. Our results also show that the impact was largest in the exact insurance segments that were exposed to tobacco surcharges, increasing confidence that the policy has an effect on enrollment. Reasons for not enrolling in marketplace coverage. It is important to know that premiums are added for up to three children under the age of 21, so a family having five children under the age of 21 will pay the same premium as a family having three children under the age of 21-year. These tobacco surcharges can be substantial, especially for older tobacco users, and they have increased over time. We also used geographic variation in tobacco surcharges to examine how the size of the surcharge affects insurance coverage, again comparing smokers to nonsmokers. , The employer determined tobacco use status through an affidavit completed by each employee covered under the employer group health plan. First, we used data that link detailed health insurance information including plan type with tobacco use data, which allowed us to examine the impact of tobacco surcharges on enrollment decisions for each market segment, rather than just the likelihood of being insured in any health insurance plan. For purposes of the premium surcharge, "tobacco use" is defined as: . Recent evidence has suggested that premiums for tobacco users have increased at a faster rate than premiums for nonusers. At incomes over 138% FPL, insurance eligibility is substantively similar across states. This allows employees to avoid the surcharge by participating in the cessation program. In these years, adult members of households included in the basic monthly CPS were surveyed in June of the first year (2014 and 2018) and January and May of the second year (2015 and 2019). It is witnessed that among all the exchange enrollees, 86% of people qualify for premium subsidies that amount to an average of nearly $492 per month. Health Aff (Millwood). This finding was robust across a variety of specifications. This option wouldn't change the amount of the federal premium tax credit, a move foreclosed by federal law. In August 2017, the United States Department of Labor (DOL), which enforces compliance with ERISA, sued Macys, Inc. as well as its third-party administrators for its self-insured health plan: Anthem Blue Cross Life and Health Insurance Company and Cigna. Employees should also be aware they are required to certify tobacco use for themselves and their dependents. The DOL alleged that this refusal to refund or credit participants for the tobacco surcharge even if they met a reasonable alternative standard violated the ERISA requirement that the full reward be available to all similarly situated individuals of a wellness program. The American Cancer Society opposed the tobacco rating provision during the congressional debate about the health-care law. Actual causes of death in the United States, 2000. US. For the purposes of this study, we limited the sample to uninsured individuals (N=519). Department of Economics, In states with surcharges, enrollment among smokers was 3.4 percentage points lower (P < .01) for every 10 percentage point increase in the tobacco surcharge. This decision of the ACA lawmakers turned out to be controversial, as some people believed that it is fair to charge higher premiums from tobacco users considering the adverse effect caused by the tobacco to a persons health and the additional cost incurred upon tobacco-related health problems. Table1 compares sample characteristics across insurance type. State by State Tobacco Laws, Taxes, and Statistics. We used two important supplements to the CPS. Thank you. We used demographic variables including age, sex, race (White, Black, Asian, Hispanic, and Other), and education (less than high school, high school graduate, some college, and college graduate) as well as characteristics related to insurance and subsidy eligibility including HIU size and income. 4 An employer cannot set a deadline by which an employee can no longer use tobacco. While surcharges unambiguously lead to higher premiums for tobacco users in nongroup markets and thus ought to lead to lower enrollment, theoretically, surcharges could lead to either higher or lower enrollment in employer coverage. Thus, perhaps somewhat counterintuitively, eliminating or limiting surcharges could potentially lead to an increase in quitting. State tobacco surcharge policy may have a substantial impact on whether tobacco users choose to remain insured and consequently their ability to receive care critical for preventing and treating tobacco-related disease. Thus, people who use tobacco are advised to not just avoid health insurance because many health insurers have implemented smaller surcharges or some have also sip them altogether. 2022 Mar;41(3):398-405. doi: 10.1377/hlthaff.2021.01313. Access to insurance and health care may be particularly important for tobacco users because they are at higher risk of developing numerous chronic health conditions and because all health insurance plans are required to provide tobacco cessation as an essential health benefit with no outofpocket costs. Additionally, among those facing a tobacco surcharge, a 10 percentage point increase in the size of the tobacco surcharge decreased the likelihood of enrollment in nongroup insurance by 8.6 percentage points (P=.02). Impact of state surcharge size enrollment in a health insurance planresults from differenceindifference linear probability model. Geographic Location The costs of health insurance premiums are not the same in every zip code, and vary from one area to another. As of July 1, 2013, the excise tax imposed on cigarettes under M.G.L. Loyola Marymount University, Low and modest-income people buying health insurance may qualify for premium subsidies that cover the majority or even all of their health insurance premiums. 4 The "tobacco surcharge" won't be offset by federal tax credits, hitting smokers with a double whammy. We first examined the impact of tobacco surcharges on the likelihood of having any type of health insurance. Our insurance expert will call you soon. Keck School of Medicine, The results indicate that smokers were at an decreased risk of being in a nongroup plan or an employer plan relative to being uninsured. Although evidence suggests that tobacco taxes and other policies that increase the cost of smoking have a direct impact on smoking, One key difference is that tobacco users in small group plans can avoid paying the surcharge by enrolling in a tobacco cessation program. For example, tobacco surcharges could lead to less employer coverage as a result of higher premiums for tobacco users in the small group market or if large employers were more likely to charge surcharges in states that allowed them in small group and nongroup markets. Eliminating tobacco surcharges or substantially limiting them is an option that state policy makers may consider in order to increase health insurance coverage among this particularly vulnerable population. See details about the 5-factor test in my previous blog post, What Is a Tobacco Surcharge and How Does My Company Offer One? The sample is limited only to states that allowed a tobacco surcharge and participated in the federal exchange. Columns 4 and 5 show results when nongroup plan enrollment was split by whether the plan was offered through the ACA marketplaces for the 2019 sample. marketing materials using the information you provide. 2020;55:983992. The interaction terms between surcharge state and current smoker show the key differenceindifference results. The table presents relative risk ratios from a differenceindifference specification similar to the one presented in Table2 and including all income levels. The .gov means its official. Even though we wont know the final outcomes of either case described above for a while, we can still draw lessons from these cases. Click here to contact our editorial staff, and click here to report an error.
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