Evidence Suggests That The ACA's Tobacco Surcharges Reduced Insurance Take-Up And Did Not Increase Smoking Cessation. We know that compliance issues arise no matter the size of the company and no matter how long a law has been in effect. CA, The 2019 ASEC included variables that specifically identify marketplace coverage, so we examined whether the effect is driven by those with marketplace plans using the 2019 data only. If dependents (such as spouses and/or dependent children) may participate in the wellness program, the reward must not exceed 30 percent (or 50 percent) of the cost of the coverage in which an employee and any dependents are enrolled. , As per the federal rules, tobacco surcharges are added to the premium amount of people who use tobacco. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. Surveys. Tobacco products are mostly used by lower-income Americans than higher-income Americans. The nationwide average pre-subsidy premium in 2020 is about $576 per month for health plans sold in the exchange. This blog post is for informational and educational purposes only. Credit Card Surcharge Laws by State: A Guide for AEC Pros. Impact of state surcharge size enrollment in a health insurance planresults from differenceindifference linear probability model. This provides some evidence that tobacco users are less likely to enroll in nongroup plans, and the following analysis examines whether that is due at least in part to state tobacco surcharges. Alabama's tobacco age restriction had been above 18 since at least the 1960s. 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. Conclusions: 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. All State Health Plan members (employee only) must complete the tobacco attestation in order to eliminate the default surcharge of $60 a month for 2023. . In addition to the RRRs 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). Unfortunately, the prepost approach may not yield accurate estimates because it does not account for the fact that tobacco rating was allowed in the nongroup and small group markets prior to 2014. We also collected qualitative data from a survey of smokers who did not have insurance through an employer or public program. [14] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. We first examined the impact of tobacco surcharges on the likelihood of having any type of health insurance. The ePub format is best viewed in the iBooks reader. In December 2019, the United States adopted a law raising the federal minimum age of sale of all tobacco products to 21, effective immediately. These data were only available for the 38 states that participated in the federal exchange. tobacco surcharge rules by state. We surveyed 1034 individuals between ages 19 to 64 with reported household incomes above 138% FPL who indicated that they were either uninsured (N=519) or insured through a State or Federal marketplace plan (N=515). Notably, tobacco users can be charged up to 50% higher premiums than nonusers for the same plan. [1], On June 20, 2015, Hawaii Governor David Ige (D) signed a bill raising the state's tobacco age restriction to 21, making it the first state to do so in the 21st century. Tobacco surcharge may also be incorporated in the employer-sponsored health plans that can increase the standard premium by up to 50% unless a state has implemented a lower tobacco surcharge. The employer can apply the tobacco surcharge only if the employees do not participate in the tobacco cessation program. Health Aff (Millwood). So the actual amount you'll pay will depend on the health insurance company you chooseand there may not be a surcharge at all. The survey included tobacco users age 1864 with incomes above. Indeed, the group of states that banned tobacco surchargesCalifornia, and a handful of Northeast statesare hardly a random sample. Finally, we ran a model using a definition of tobacco use closer to the definition used for enrollment in the ACA, which includes the use of other noncigarette tobacco products. External Relations: Moira Delaney Hannah Nelson Caroline Presnell In the 37 states that use the federal insurance exchange, HealthCare.gov, the tobacco surcharge was paid by about 7 percent of 5.1 million consumers who enrolled, according to federal data. 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. 8600 Rockville Pike Since the ACA allows states to set their own policy regarding tobacco surcharges, it is one aspect of the ACA that may be more amenable to modification, especially during times when partisan divide in congress makes it difficult to amend federal regulations. Arkansas limits it to 20%, and Kentucky limits it to 40%. These people are also less likely to receive timely medical treatment at the time when they will need it. 17 Instead, the employer gave employees only two options: 1) dont use tobacco and avoid the surcharge; or. More Mercer posts Currently, three states limit surcharge sizes to less than 50%Kentucky (40%), Arkansas (20%), and Colorado (15%), in addition to the six states plus the District of Columbia that have eliminated surcharges all together. To learn more: Call 1-866-NY-QUITS (1-866-697-8487) toll free; Text (716) 309-4688; or. affordable care act, enrollment, health insurance, marketplace, premiums, smoking, tobacco surcharge, Reasons for not enrolling in marketplace coverage. Moreover, the employers failed to give participants who met the RAS a way to avoid the surcharge retroactively, which is required under HIPAA's wellness rules. The $25 surcharge (per person, per pay) applies to employees and spouses covered under the Einstein health plan. prevent or reduce tobacco use) of the cost of employee-only coverage under the plan. to pay the costs the government incurred to bring the lawsuit against Macys. In the 37 states that use the federal insurance exchange, healthcare.gov, the tobacco surcharge was paid by about 7 percent of 5.1 million consumers who enrolled, according to federal data. Although the majority of states do allow insurers to impose tobacco surcharges of up to 50%, many insurers choose to use smaller surcharges or skip them altogether. Gehr Family Center for Health Systems Science and Innovation, Column 1 shows the likelihood of having any insurance in our full sample; column 2 shows the likelihood of having nongroup insurance among a sample of individuals with either nongroup insurance or no insurance; columns 3 and 4 show the likelihood of having marketplace insurance among those reporting having nongroup insurance or being uninsured. We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. 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. 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). 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. Even though federal law permits a tobacco surcharge on health insurance, some states prohibit this. We found that living in a surcharge state decreased the probability of enrolling in a nongroup plan by 13.3 percentage points (P<.01) among these individuals who are most likely to benefit from the marketplacesthose with incomes over 138% FPL who do not have insurance through their employer or a public program. Minors are prohibited from buying alternative nicotine products, including e-cigarettes.6 Establishments are required to post signs stating that sales to minors are prohibited.6 Local tobacco laws 20 By 1920, 46 states had implemented an age limit for tobacco sales, of which 14 set the limit at 21. State fixed effects were included in columns (2) and (4) include state fixed effects; however, they did not substantially affect the results. This Ballotpedia article is in need of updates. 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). We then asked respondents to select all reasons they did not enroll in a marketplace plan. Sale and distribution of tobacco products-WAC 314-10: The Washington State Liquor and Cannabis Board (WSLCB) regulates the sale and distribution of all tobacco products, and reports enforcement activities to the Department of Health. PROOF OF AGE MAY BE REQUIRED FOR PURCHASE. The Affordable Care Act allows insurers to charge up to 50% higher premiums to tobacco users, making tobacco use the only behavioral factor that can be used to rate premiums in the nongroup insurance market. [5][6] Over 54% of the country's population lived in states that had signed legislation setting 21 as the tobacco restriction age at the time the federal law set the nationwide tobacco age restriction. All states with a minimum tobacco age of 21 decreased the limit. It is now looking at a state-by-state approach to work on rolling back . During plan year 2013, Macys included a notice within the Tobacco Affidavit alerting the employee to the availability of a reasonable alternative standard, so it satisfied the notice requirement. September 29, 2021. As such, several previous studies have shown that gaining access to health insurance can have large effect on both quitting smoking and cancer screening. Federal government websites often end in .gov or .mil. 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. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. Allowing higher premiums for tobacco use in the nongroup market results in lower health insurance enrollment among smokers, which is driven by decreased enrollment in the nongroup market. Like the Macys case, this case is still pending. Our results are robust to these alternative specifications. Under a law signed by Gov. Albeit if a person with an average premium is subjected to a 50% tobacco surcharge, then their monthly premium would increase to $864 per month, and their premium subsidy would not change. Now is a good time to review whether your wellness program is compliant with ERISA and other wellness program laws, including HIPAA, ADA, and GINA. [PMC free article] [PubMed] [CrossRef] [Google Scholar], 1 Share & Print Documents & Downloads Issue Brief - States Vary on Higher Premiums Paid by Tobacco Users Under the ACA Related Tags Affordable Care Act 2022 Mar;41(3):398-405. doi: 10.1377/hlthaff.2021.01313. Six States (California, New York, New Jersey, Massachusetts, Rhode Island, and Vermont) plus the District of Columbia have outlawed tobacco surcharges altogether, while Arkansas, Colorado, and Kentucky have limited tobacco surcharges to levels less than 50%. Being in a surcharge state decreased the likelihood of a smoker having health insurance by 4.0 percentage points (P=.02). Current federal law allows health insurance plans and companies to charge tobacco users an additional 20%. 8 In order to provide context to our results on the reasons tobacco users did not enroll in health insurance, we also included separate data from a June 2019 online survey conducted using Qualtrics Research Panel. We coded respondents as current smokers if they reported now smoking cigarettes either every day or some days. This definition is slightly different from the definition used to apply the tobacco surcharge, which is the use of tobacco products four or more times, on average, per week within the past six months. We used the narrower definition, considering only cigarette smokers because cigarette smokers make up most of the population of every day tobacco users I'm at work right now, but here is a quick rundown of what we have going on here. Our analysis also found that tobacco surcharges have a . Age The health insurance premiums are based on an individuals age, as older people are charged higher premiums compared to younger people. Tech: Matt Latourelle Nathan Bingham Ryan Burch Kirsten Corrao Travis Eden Tate Kamish Margaret Kearney Joseph Sanchez. 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. Tobacco use is the largest cause of preventable illness in the United States. You will be charged a $25 tobacco use premium surcharge in addition to your monthly medical plan premium if you or any dependent (age 13 and older) who is enrolled on your SEBB medical coverage uses a tobacco product. 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. , The functionality is limited to basic scrolling. Tobacco Surcharges Associated With Reduced ACA Marketplace Enrollment. This report must include the name of each insurance carrier on behalf of which the TPA paid. , Visit www.nysmokefree.com, for information, to chat online with a Quit Coach, or to sign up for Learn2QuitNY, a six-week, step-by-step text messaging program to build the skills you need to quit any tobacco product. Federal government rules let employers charge smokers up to 50 percent of the cost of their health insurance benefits. 3 Michael F. Pesko, Georgia State University. By 1920, 46 states had implemented an age limit for tobacco sales, of which 14 set the limit at 21. 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. Plans and companies to charge tobacco users an additional 20 %, and a handful of Northeast statesare hardly random. 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