There's a big debate happening in the states right now over whether to allow insurance companies to charge tobacco users a 50 percent premium surcharge under Obamacare — you can read more about that in my story in today's paper.
There's an equally important debate happening here in Washington, one that I wasn't able to spend much time on in that article: Figuring out who counts as a tobacco user in the first place. A smoker who goes through a pack a day likely fits the bill, but what about one who only smokes the occasional cigarette in the bar? The person making a quit attempt? The user of e-cigarettes?
These are questions that, 10 months before this provision goes into effect, are still wide open. They are also a great example of why a 900-page law requires thousands more pages of regulation, as the federal government tries to turn relatively vague provisions into concrete law.
Let's start with the law itself. It says, in Sec. 1201, that "health insurance issuers for health insurance coverage offered in the individual or small group market" can only use three factors to set a premium rate. One is age and another is the geographic area where the subscriber lives. The third is "tobacco use" with the caveat that "such rate shall not vary by more than 1.5 to 1."
That's where the 50 percent surcharge comes from. But the law says nothing more about what counts as "tobacco use." And that's a hard factor to regulate: Unlike age, where subscribers have one definite birth date, the idea of who counts and doesn't count as a tobacco user is really fuzzy. Enter the regulators!
On Nov. 26, Health and Human Services put out a 35-page regulation that attempted to move forward on this tobacco use question. They start off acknowledging that when states have issued similar regulations, they have, apparently, dodged the issue of a definition altogether:
There is not a clear and consistent definition of tobacco use among the states for rating purposes. Numerous states such as Louisiana, Maine, Massachusetts, Minnesota, and New Mexico allow tobacco use to be considered as a rating factor in both the individual and small group markets. While these states provide a definition of what constitutes a tobacco product, they do not specifically define ‘‘tobacco use.’’
The worry of not writing any definition, though, is that it would be difficult to know who counts as a tobacco user. Some patients advocates I talked to thought this could leave subscribers in a precarious position; if they said they weren't a tobacco user, but were in fact an occasional smoker, they could be accused of fraud by the insurance company.
HHS proposes getting around this by setting a standard question to determine who counts as a tobacco user.
One possible approach for purposes of implementing this provision upon which we invite comment would be to include one or more questions on tobacco use in the single streamlined application under or in connection with other enrollment- related processes for an Exchange.
HHS does not suggest what that question, or questions, ought to be, and instead invites comment on the matter. So, enter the comments!
Seventy groups submitted comment on the tobacco rating provisions, with more than a few ideas of how to decide who counts as a tobacco user. The Campaign for Tobacco Free Kids argues that it should be defined as smoking within a set amount of time.
"The Department will need to determine a period that is not so short as to allow allow a person to identify himself or herself as not a tobacco user if he or she 'quit' the day they applied for health insurance but not so long as to include people who have actually quit," the group writes in public comment.
America's Health Insurance Plans, which represents most health insurance companies, proposes a two-part question: "Have you used tobacco in the last twelve months?” and “Are you currently using tobacco products?”
The American Cancer Society, which opposed the provision, proposed a much shorter, 30-day look-back period. Policy director Steve Finan also thinks that frequency of use should be addressed. "We suggested in our comments that HHS do consumer testing to figure out what questions consumers would understand, and then are able to respond to them accurately," he told me when we spoke last week.
Now, the issue is back in the regulators' court. They have to wade through all these suggestions and figure out the best way to define who counts as a tobacco user. The financial implications will be big: For a low-income American faced with the surcharge, their premium could jump from $708 to $3,308. That jump is larger than 50 percent due to the fact that the base premium gets a federal subsidy, while the tobacco surcharge does not.
The Affordable Care Act was a long piece of legislation when it started. But trying to answer questions like these, with hundreds scattered throughout the law, seems to ensure that the regulations surrounding health reform will be even longer.