With less than six months until the District’s health insurance exchange is set to debut, policymakers have made another momentous decision that will affect how much residents pay for coverage.
On Monday, the D.C. exchange’s executive board voted to prevent insurers from charging higher premiums to smokers than to nonsmokers — meaning nonsmokers are likely to pay modestly higher rates than if smoking surcharges were permitted. The District joins three states — Massachusetts, Rhode Island and Vermont — that have banned tobacco surcharges on their own exchanges.
Mohammad N. Akhter, chair of the D.C. Health Benefit Exchange board and a former city health director, said the authority had no hard data on what cost impact banning tobacco surcharges might have on nonsmoker premiums. But he said the vote furthers the board’s policy of encouraging broad participation in the exchange.
“It makes public-health sense to make sure we do the right thing by the people,” he said. “Smoking is an addiction, and we just want to give people a fair shot to participate in the health care exchange.”
The surcharge ban applies to health plans sold within the exchange, which is set to open Oct. 1 and must be used by individuals and, if the D.C. Council endorses a previous board recommendation, employers covering up to 50 people. Larger employers purchasing outside the exchange would be able to choose plans that charge smokers more.
Under the federal health care overhaul, which is driving the nationwide rollout of health exchanges, insurers are allowed to charge smokers as much as 50 percent more to cover the higher costs of providing them care. But the idea of differentiating premiums has been opposed by a motley coalition that includes both the tobacco industry and anti-cancer organizations — the former considers such surcharges to be unfair discrimination against smokers; the latter are concerned the practice could leave too many low-income residents uninsured.
“Our concern is that a tobacco use surcharge carries a risk of rendering health insurance unaffordable for many people,” Campaign for Tobacco-Free Kids president Matthew Myers told The Post’s Sarah Kliff earlier this year.
That is the main reasoning expressed by District exchange leaders explaining their decision to eschew differentiated pricing, noting in particular that the city’s low-income and African American residents have higher rates of tobacco use.
In a statement, Akhter referred to tobacco use as a “pre-existing medical condition” and added that charging smokers more would be “in direct conflict with our efforts to help people quit smoking.”
Under the federal law, new private health insurance plans must cover the full costs of certain proven programs to help their customers quit smoking, and all plans sold through the exchange must cover smoking cessation. D.C. board members, according to a news release, “expressed their strong support for making consumers and their health care providers aware of those benefits.”