Outside the Beltway

Should Smokers Pay Higher Health Premiums?

James Joyner
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Radley Balko‘s alter ego “Randy” argues that they should in an AJC op-ed.

Health riskers ought to pay

Auto and life insurance companies regularly vary premiums with risk. If you have a poor driving record, drive a sports car, or live in a high-theft area, you’re going to pay more for your car insurance than most.

There’s no reason why health insurance shouldn’t operate the same way. This is particularly true with state-issued health plans, where not only do you have the problem of subsidizing and fostering poor decisions, but the burden of those poor decisions then falls on taxpayers.

The question becomes, who should pay the health care costs of a state worker who chooses to smoke, then gets sick as the result of that decision: the person who chooses to smoke, or Georgia taxpayers? I have a hunch what most Georgia taxpayers would prefer.

Quite right. If we’re going to make health care a “right,” then we should socialize it. If we’re going to maintain a private system, though, insurers ought to be able to discriminate on the basis of pre-existing conditions and risky behavior on the part of their customers. Indeed, amortizing risk pretty much defines “insurance.”

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16 responses to “Should Smokers Pay Higher Health Premiums?”

  1. Fersboo Avatar
    Fersboo

    I thought the increased taxes I pay when I purchase my cigarettes was to cover the burden that smokers like me added to the health care system. Are you and ‘Randy’ telling me that the government and its lawyers lied when they brought Joe Camel and the rest of the tobacco industry to trial?

  2. Brian J. Avatar
    Brian J.

    Yeah, the sales tax I pay on the bullet covers the burden on the health care industry when I play Russian Roulette. It also chips in for the cleaning crew, too.

    Taxes = fees for insurance services in this merry world where commerce and the state are one.

  3. carpeicthus Avatar
    carpeicthus

    Thunderbird: I believe that when you want to call someone an “idiot,” you have a higher responsibility, at least in that same sentence, to not write like a slow third grader. I’m really not sure the insurance industry is run by a bunch of radical liberals.

  4. herb Avatar
    herb

    Next thing will be overweight people, blind people, people with impairments, people who drink alchol, people who “Play Around” and whoever the health nuts think of. When are the “non-smokers” going to realize that the whole non smoking thing is about money and greedy lawyers. What did the States do with all the money they got from the “Tobbaco settlement”???

  5. Mike Avatar
    Mike

    I thought it was pretty well established that smokers have *lower* health care costs than non-smokers. Smokers die young. Sure, their deaths are expensive, but everybody’s death is expensive. The difference is that smokers do not enjoy decades of old age, where daily, routine medical costs are the highest.

    So should smokers get a discount? Why not?

  6. The Indomitable Gravecat Avatar
    The Indomitable Gravecat

    It’s dodgy ground, really. On the one hand, I don’t have a great deal of love for smokers in general; but on the other hand, it’s a slippery slope kind of situation. Like herb said, if health-care costs are different for smokers, then who next?

  7. Dean Avatar
    Dean

    I have no problem with smokers paying a higher premium.

    Is it “dodgy ground”, really. If you have a preexisting condition like cancer, I want to see you get reasonably priced healthcare. Why are smokers different, is this not a preexisting condition?

    Unlike many cancer patients, smokers have chosen to slowly kill themselves and in many cases have participated in actions that cause cancer. They should be paying a fair price for their choice along the way, so when they do get cancer, and they will, the insurrance company will have enough money to let them live an extra few months.

    As far as taxes: dump the stupid tobacco tax, that is putting $$$ in everyplace but where it is needed. Make it up in insurrance premiums and let the insurrance company use testing to confirm.

    Again – Why should smokers get to dodge the cost?

  8. Brian J. Avatar
    Brian J.

    Again, all commenters seem to confuse government with the service provided by insurance companies. This is how things get nationalized. Soon, perhaps, they will be one and the same because so many clamor for it.

    Why should someone who orders the prime rib pay more than the hamburger? Why should someone who owns a Miata pay more than someone who owns a Taurus? Why should someone with three bedrooms pay more rent than someone with a studio?

    Insurance is not a right, it’s a service provided by individual people. If private companies want to charge more with riskier lifestyles, so be it. This does include alchohol, philandering, using drugs, not hitting the gym three times a week.

  9. John Burgess Avatar
    John Burgess

    I don’t think it well-established that smokers actually cost the health care system less. As a smoker, I’d love to see that, but there are no serious studies I’ve ever come across.

    Could Mike–or others–perhaps point me to some?

  10. Steve Avatar
    Steve

    I thought the increased taxes I pay when I purchase my cigarettes was to cover the burden that smokers like me added to the health care system. Are you and ‘Randy’ telling me that the government and its lawyers lied when they brought Joe Camel and the rest of the tobacco industry to trial?

    Pray tell, how would this work? Does the government send the insurance company a check? Or does the money go to the treating hospital? If my premiums go up because of smokers do I get a check? I’d like to know exactly how this mechanism works because my guess is it doesn’t work.

  11. Fersboo Avatar
    Fersboo

    Wow James, you attract a particular cranky kind of smokin’ Nazi, don’t you?

    State run health insurance (you know, referenced right there in the excerpt) is government run health insurance!! The tobacco trials & settlement was to reimburse the states for the health care burden imposed(!) by the tobacco companies on the states.

    Now for the private company health insurance companies, smokers already pay an increased premium, along with the non-smokers. And everyone within an employer’s plan pays a higher premium if one of the employees has cancer, or has 1 or more maintenance drugs (such as high-blood pressure or diabetic medicine). Not that insurance companies need any reason to increase premiums.

    Since my company pays 90% of the health premiums, it isn’t going to affect anyone if the insurance company jacks rates up beacuse the company employs a smoker.

    What needs to change is the consumer or insurance end-user’s behavior. As Walter Williams has said over and over, you don’t take your car to the insurance to pay for fixing the little dings in your car, why expect that your health care should pay for everything. When everyone stops using their insurance to pay for every office visit and every dose of limp-dick medicine, the premiums for insurance will start to decline.

  12. Mike Avatar
    Mike

    Here you go:

    http://content.nejm.org/cgi/content/abstract/337/15/1052

    “Results Health care costs for smokers at a given age are as much as 40 percent higher than those for nonsmokers, but in a population in which no one smoked the costs would be 7 percent higher among men and 4 percent higher among women than the costs in the current mixed population of smokers and nonsmokers. If all smokers quit, health care costs would be lower at first, but after 15 years they would become higher than at present. In the long term, complete smoking cessation would produce a net increase in health care costs, but it could still be seen as economically favorable under reasonable assumptions of discount rate and evaluation period.”

  13. McGehee Avatar
    McGehee

    As Mike points out — up in Tennessee, smokers are subsidizing the care for my Alzheimer’s-afflicted 83-year-old father-in-law. Who never smoked a cigarette in his life.

  14. John Burgess Avatar
    John Burgess

    Mike, Thanks!

  15. Steve Avatar
    Steve

    Wow James, you attract a particular cranky kind of smokin’ Nazi, don’t you?

    It would help if you wrote more clearly. You stated that the cigarette taxes were to be used to cover the increased costs smokers impose on the health care system. Your statement was flat out wrong.

    Since my company pays 90% of the health premiums, it isn’t going to affect anyone if the insurance company jacks rates up beacuse the company employs a smoker.

    Wrong, wrong, wrong. Employees are paid a wage/compensation package. If employees smoke at higher rates in one company that company will have higher compensation costs (health care costs). Thus, the wage will be either lower, grow at a slower rate or there will be less people employed (or all three). There is no such thing as a free lunch, which is precisely what your comment implies. The higher health care/insurance costs will impact employees in terms of raises, future benefits, and number of employees. Hell it could even force the company to shut down or relocate some or all of its facilities overseas to cut costs.

    What needs to change is the consumer or insurance end-user’s behavior. As Walter Williams has said over and over, you don’t take your car to the insurance to pay for fixing the little dings in your car, why expect that your health care should pay for everything. When everyone stops using their insurance to pay for every office visit and every dose of limp-dick medicine, the premiums for insurance will start to decline.

    It is simply stunning that you can write such a comment. After all didn’t you say that jacking up insurance rates doesn’t affect employees where you work? Who cares if health insurance rates go up by an order of magnitude, your employer will pay for it.

    Sheesh.

  16. Matt Avatar
    Matt

    Any health care system that fails to take into account that over 60% of claims are related to lifestyle/conduct choices of the individual concerned is on its way to self destruction as has been the history of the socialistic plans in Europe.

    Higher premiums for poor choices is necessary as a club. The ability to accummulate money in a health savings account is a carrot for right decisions.

    Yes, smokers should pay more as should those who allow themselves to become excessively overweight.

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