Although low- and middle-income tobacco users will get premium subsidies meant to make health insurance more affordable, that government assistance would not apply to the tobacco surcharge, leaving the smoker to foot the bill.One analysis, prepared by the nonpartisan Institute for Health Policy Solutions, estimated that the tobacco surcharge could cause a low-income individual’s annual premiums to jump from $708 to $3,308.
Smokers these days are disproportionately poor. According to the CDC, 28.9 percent of adults below the poverty line smoke, while only 18.3 percent of adults at or above it do. Even more striking, 45.2 percent of Americans with a GED diploma smoke, while only 9.9 percent of college-educated adults do. The surcharge will mostly hurt the poor and less-educated, making insurance unaffordable for them. This is why anti-smoking groups have joined Big Tobacco in opposition to the penalties. As David Woodmansee, a representative of the American Cancer Society, said, “We’re anti-smoking, not anti-smoker.”Luckily, because Obamacare is full of perverse incentives, smokers have an out. A $3,308 premium would be more expensive than the penalty one would have to pay for not buying insurance: $695 per year at minimum. Even for wealthy couples it wouldn’t reach much higher than $2,025 (figures here). So smokers could pay the penalty for now, and then buy insurance later if they wind up getting cancer or some other disease. Since the ACA forbids insurers from discriminating based on pre-existing conditions, smokers who do get sick won’t have difficulty picking up coverage down the line. This will contribute to destabilizing the whole health care system. Obamacare does have a way of making strange bedfellows, and we’re likely to see more of them as other provisions roll out. President Obama did promise to unite the country, but this probably wasn’t what he had in mind.