ACA Tobacco Surcharge: Affordability and Enrollment Among Tobacco Users

  • Waters, Teresa (PI)

Grants and Contracts Details


The Patient Protection and Affordable Care Act (ACA) established state and federal health insurance marketplaces that allow individuals without access to employer-provided health insurance to purchase insurance. In addition, the ACA stipulated that premiums for all plans sold on the individual market can only vary by age, family size, geographic location and tobacco use. Of these, tobacco use is unique in that it is the only behavioral factor associated with health status that can be used to determine premiums. Insurers are allowed to charge tobacco users a surcharge up to 50% above normal premiums. Higher premiums for tobacco users reduce the availability of affordable coverage1-3 and may lead tobacco users to opt out of coverage, select different types of plans, or misrepresent their tobacco use at enrollment. All three behaviors could have significant consequences for their healthcare. For example, if tobacco users opt out of coverage, they will have reduced healthcare access. If tobacco users enroll but select plans with lower surcharges, they could select plans that cover less, have higher cost-sharing, or use limited provider networks. Finally, if tobacco users lie about their use, they may avoid care commonly associated with tobacco use, fearing their insurer may discover their tobacco use and retroactively charge them higher premiums. We will compile enrollment data from federally-facilitated and state-run health insurance marketplaces to examine how tobacco surcharges affect enrollment decisions for tobacco users. Our study has three primary aims: Aim 1: Examine the impact of tobacco surcharges on enrollment, plan choice, and under-reporting of tobacco use. Tobacco surcharges vary widely across the country as a result of both state policy and the actual surcharges implemented by insurers.1,2 In some regions, tobacco users face the same premiums as non-users, while in other regions, tobacco users face a range of surcharges depending on the plan they select. We will exploit this variation to rigorously test how different types of markets and tobacco surcharge levels affect enrollment decisions. All other factors held constant (e.g. income, age, education): Prediction 1: Tobacco users will be less likely to enroll in marketplace plans in regions with high surcharges. Prediction 2: Tobacco users will be more likely to lie about tobacco use in order to qualify for lower premiums when surcharges are high. Aim 2: Create population-based estimates of how many tobacco users and non-tobacco users lack access to affordable coverage. A stated goal of the ACA is to ensure that health insurance is affordable for nearly all Americans. We will examine how affordability, defined as access to a plan with premiums that cost less than 8% of income,4 varies by tobacco use, race/ethnicity, and income. Since tobacco use is more prevalent among lower income individuals, and tobacco surcharges lead to higher premiums, we expect that reduced access to affordable coverage will be felt most acutely among low-income tobacco users. Using premiums from the health insurance exchanges, and various survey and census data, we will estimate the number of tobacco users and non-tobacco users that lack access to affordable coverage across the country. Prediction 3: Tobacco users will select different and less “adequate” plans than non-tobacco users when surcharges are high. Aim 3: Evaluate affordability and enrollment decisions for tobacco users over time. As insurers gain experience with the market, they have modified premiums for tobacco users and non-tobacco users. At the same time, as enrollees have likely gained experience with the market and become more knowledgeable about tobacco surcharges, their behavior may have also changed. It is important examine these patterns and consequences of these changes over time on affordability and enrollment decisions for tobacco users. We will obtain premium and enrollment data in each year (2015 – 2017) to see how affordability and associated enrollment change over time as the markets mature. Tobacco use is the largest cause of preventable cancer disease in the US.5 Tobacco use is the largest cause of preventable cancer disease in the US.5 Evidence that tobacco users opt out of coverage, select plans with lower premiums, or misrepresent use would have wide implications for their ability to receive care critical for preventing and treating cancer, such as cancer screenings and tobacco cessation programs. This study will provide rigorous and critical evidence on the consequences of tobacco surcharges on the availability, affordability, and adequacy of ACA marketplace health plans for tobacco users.
Effective start/end date1/1/1912/31/20


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