Smokers pay much more for health insurance but don’t seem to care

The Patient Protection and Affordable Care Act brought a lot of relief to consumers concerned about not being able to get coverage at an relatively low price. However, that hasn't necessarily been the case for the millions of Americans who are frequent smokers. Their coverage costs tend to be much higher, but it's no deterrent to their habits.

The ACA allows smokers to be charged as much as 50 percent more for the same coverage as people who fit similar demographic profiles but don't smoke, according to a report from St. Louis television station KSDK. The reasons why smokers have to pay more are obvious: The habit puts them at much greater risk for a variety of health concerns that can be quite costly for insurers to deal with. Nonetheless, the cost can be quite difficult for many to afford.

Smoking is still a major issue health insurers and consumers need to overcome.

Why is that the case?
Those who smoke tend to be from lower-income groups, so an increase in coverage costs can be especially painful for them, the report said. This is especially true because low-income smokers in a number of states fall into the so-called “coverage gap” between the federal thresholds for exchange eligibility and Medicaid programs that were not expanded in dozens of states.

That means they're going to end up having to pay full price for their coverage if they decide to take it on at all, the report said. Today, nearly 2 in every 5 adults who go without health insurance are smokers. Problematically, though, the smoking habit bumped many smokers' annual premiums to more than their income. In general, too, smokers tend to pay about 14 percent of their salaries for health insurance. That number is just 7 percent for non-smokers.

That doesn't stop them
One might think that all those extra costs associated with smoking would be enough to push low-income Americans away from cigarettes, but it's not, according to a recent study from Yale University. Smokers who were hit with the additional charge for their habit were nearly 12 percent more likely to just go without coverage on the whole. Those under the age of 40 were 20 percent more likely to eschew coverage rather than quit smoking.

The researchers theorized that by putting a substantial price to smoking, it helped people rationalize the decision to keep doing it, the report said. That is to say, most people know smoking is a bad and rather expensive habit, but not one they're inclined to give up. Therefore, trying to scare them away with higher costs might be unsuccessful simply because it “can alleviate the guilt of engaging in them, which has an unexpected effect: the behaviors increase.”

For these reasons, insurers might want to go with more of a carrot-related approach than continuing to rely on the stick. Incentivizing people to quit smoking, rather than punishing them for doing it, may be able to help reduce the rates at which people smoke or go without insurance because they do so. That, in turn, can help both sides of the equation immensely.