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. States that prohibit tobacco surcharges completely are California, Massachusetts, New Jersey, New York, Rhode Island, Vermont, and Washington, D.C. Connecticut also prohibits tobacco surcharges, but only for health plans sold in the states health insurance exchange (Access Health CT). Further, we included state tobacco policy variables which we calculated from the CDC State Tobacco Activities Tracking and Evaluation System and included state cigarette taxes per pack and a measure of clean indoor air policies that were coded as 1 if the state banned smoking in all indoor bars, restaurants, and private workplaces and 0 otherwise. Some of those states later passed a state law raising the state-level tobacco age restriction to 21. After calculating AGI, we excluded adults over 65 since they would likely be covered by Medicare. PROOF OF AGE MAY BE REQUIRED FOR PURCHASE. CA, Employers that are ALEs (i.e., have 50 or more full-time equivalent employees . Our models test the effect of the surcharge on enrollment and do not provide evidence of higher enrollment among nonusers. [12] Under a law signed by Gov. 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. For the purposes of this study, we limited the sample to uninsured individuals (N=519). Due to the sampling design of CPS, all households from CPSASEC can theoretically be linked to the CPSTUS in either January or May of 2015 or 2019. Within each HIU, we estimated the family income that would be used to determine eligibility for marketplace subsidies or Medicaid enrollment by summing the simulated adjusted gross income (AGI) variable from the CPS across all members of the HIU. We also used geographic variation in tobacco surcharges to examine how the size of the surcharge affects insurance coverage, again comparing smokers to nonsmokers. , 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. However, the interaction term between nonsurcharge state and current smoker was only statistically significant at P<.05 for nongroup insurance, which gives us confidence in the specifications presented in Table2 that excluded individuals with insurance through an employer or public program. Unable to load your collection due to an error, Unable to load your delegates due to an error, Reasons for not enrolling in marketplace coverage. Tobacco surcharge has also been prohibited in Connecticut but only for plans that are sold through the states health insurance exchange. This site needs JavaScript to work properly. In addition, 14 percent used . Standard errors, clustered at the state level are shown in parentheses. State Specific Rating Variations. Evidence that tobacco surcharges lead to lower takeup of marketplace plans is further bolstered by results from a separate survey of tobacco users. University of Southern California, Overall, this study found that tobacco surcharges led to significantly lower enrollment in nongroup health insurance among smokers. Surveys. 18. The health law also makes clear that financial help. 4 (May 13, 2013) On May 9, 2013, that the Executive Yuan (Cabinet) of the Republic of China (on Taiwan) approved amendments to the Tobacco and Alcohol Tax Act and to the Tobacco Hazards Prevention Act that, if they become law, would, respectively, increase the taxes and the health surcharge on tobacco products. However, since theoretically tobacco surcharges should primarily affect the decision to purchase nongroup insurance, our preferred specification excluded individuals who had insurance either through an employer or a public program such as Medicare, Medicaid, or Military insurance. Second, due to Medicaid expansions, eligibility for marketplace subsidies and Medicaid overlaps between 100% and 138% FPL in some states, but not others. the display of certain parts of an article in other eReaders. Another potential data limitation is that we only had complete, linked smoking and health insurance information for 2015 and 2019, which we pooled in our main analysis. In order to aggregate surcharge data to the state level, we first computed the median surcharge in each marketplace rating area by calculating the ratio between the plan premiums offered to tobacco and nontobacco users for a 45years old. In addition to the coefficients shown, all regressions control for sex, age, age squared, race, family size, education, log family income, state Medicaid expansion status, state federal marketplace use, state cigarette taxes, clean indoor air laws, and year (2015 vs 2019). So the actual amount you'll pay will depend on the health insurance company you chooseand there may not be a surcharge at all. Table TableA1:A1: AppendixS1 presents summary statistics by insurance type separately for the 2015 and 2019 samples. 41. The results from the linear probability models are shown in Table2. We also calculated state policy variables to adjust for differences that may be correlated with tobacco surcharge policy and health insurance enrollment including whether the state was a Medicaid expansion state and the use of a statebased marketplace. Participants overwhelmingly reported that cost of health insurance was a major reason for either not visiting their state's health insurance marketplace website or not purchasing a plan. Tobacco use is the leading preventable cause of death in Georgia and is a modifiable risk factor for many chronic diseases, which costs the state more than 11,700 lives per year and nearly $3.2 billion in direct healthcare and indirect costs, such as lost wages. Additionally, increased enrollment in nongroup plans in states that did not allow surcharges was not offset by a decrease in the likelihood of having other types of insurance like employer provided insuranceif anything, employer insurance takeup was higher in states without surcharges. Health Aff (Millwood). It was then decreased from 21 to 19 in 1963. Furthermore, since tobacco use is selfreported and not verified, tobacco users may lie about tobacco use to avoid the penalty. 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. The health insurance premiums are low for people under the age of 21, and there is a cap of three times the rates that apply to a 21-year old. A few years back it was discovered by a Health Affairs analysis that more than 16% of the small employers were using tobacco surcharge, and about half of them were not offering a tobacco cessation program. The California Complementary Legislation (or "directory law"), Revenue and Taxation Code section 30165.1, requires the Attorney General to publish a directory of tobacco product manufacturers and brand families of cigarettes and roll-your-own tobacco that are lawful for sale in California. Will every state implement a surcharge? but it is unknown whether there are differential effects for smokers or those living in high surcharge states. The ePub format is best viewed in the iBooks reader. Tobacco Use People who use tobacco can be charged up to 50% more than the people who dont use tobacco. Third Party Administrators (TPAs) that make payments to hospitals and ambulatory surgical centers on behalf of one or more insurance carriers (not self-insured plans) must file an annual electronic report with the HSN. Macys offered a tobacco cessation program to employees, but the only way to avoid the surcharge was for the employee to declare that all covered members in his or her family remained tobacco free for a period of six consecutive months during the health plan year. Employees are hiring attorneys who are familiar with the wellness incentive rules under the Employee Retirement and Income Security Act (ERISA) and are challenging employer wellness programs that are allegedly not in full compliance. All models used CPSASEC weights, and standard errors are clustered at the state level. We hypothesized that there would be lower enrollment among smokers, relative to nonsmokers, in states that allowed tobacco surcharges compared to states that outlawed rating by tobacco use. Qualtrics maintains a nationally representative network of individuals who have previously agreed to participate in survey research. , The nationwide average pre-subsidy premium in 2020 is about $576 per month for health plans sold in the exchange. Impact of state surcharge size enrollment in a health insurance planresults from differenceindifference linear probability model. This allowed us to examine the impact of surcharges on each type of insurance coverage without worrying about endogenous sample selection that could cause bias in the linear probability models where the sample is limited to individuals with nongroup plans and those who are uninsured. Those on employer health plans can avoid the surcharge by joining an employer based tobacco cessation program. Six states and DC have banned tobacco surcharges in their entire individual market: California District of Columbia Massachusetts New Jersey New York Rhode Island Vermont Virginia lawmakers passed legislation in 2022 that would have banned tobacco surcharges as of 2023, but the governor vetoed the measures. We limited the sample to individuals in states with tobacco surcharges, comparing the impact of the size of the average tobacco surcharge on differences in insurance coverage between smokers and nonsmokers. Gehr Family Center for Health Systems Science and Innovation, When it recently extended Indiana's Medicaid waiver for three years, the Centers for Medicare and Medicaid Services (CMS) let the state raise monthly premiums for Medicaid enrollees who smoke. Table TableA2:A2: AppendixS1 presents results from these regressions separately for the 2015 and 2019 samples. For purposes of the premium surcharge, "tobacco use" is defined as: . What is a tobacco surcharge? Liber AC, Hockenberry JM, Gaydos LM, Lipscomb J. Current federal law allows health insurance plans and companies to charge tobacco users an additional 20%. Cameron M. Kaplan, PhD and Erin K. Kaplan, PhD. USA. Operations: Meghann Olshefski Mandy Morris Kelly Rindfleisch This blog post is for informational and educational purposes only. Tom Wolf (D) on November 27, 2019, Pennsylvania's tobacco age restriction was set to increase from 18 to 21 on July 1, 2020. 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. Though the Affordable Care Act has included a provision to allow insurers to charge higher premiums from tobacco users but has not specified what constitutes tobacco use. 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