By Chad Frey
A computer glitch has delayed full implementation — but there's a new fee coming for those who smoke.
Under the Affordable Care Act, insurance companies can charge up to 50 percent more for insurance premiums for those who smoke.
The Kansan contacted three smoke shops in Newton to ask about the provision — none reported studying the provision carefully. Two managers claimed to know nothing about it.
Daven Flax, owner of Tee-Pee smoke shop, said if a 50 percent surcharge is imposed for smokers, his business will suffer.
"It will hurt business," Flax said. "I don't think the surcharge will happen at the 50 percent rate. I've observed that a lot of times lobbyists go after a big number, just to get something. That is only my opinion."
Due to a computer glitch, imposing the full surcharge on the oldest smokers will be delayed until 2014.
Public interest law professor John Banzhaf of George Washington University developed and helped legalize the concept of differential health insurance premiums, and lobbied for its inclusion for smokers under the law.
He said a smoking worker can cost an employer more than $12,000 more each year, and smoking costs the American economy some $300 billion annually. Driving those costs down is why he pushed for the surcharge provision.
The decision of how much to charge will be left to insurance companies, and employers will have decisions to make regarding coverages.
"Tobacco users cost companies when it comes to healthcare dollars, and I think companies are trying to match their employees with what their needs are," said Lisa Bartel, Health & Wellness Coordinator for the Harvey County Health Department. "Some companies make sure there are tobacco cessation provisions to help employees who would like to quit."
Starting in 2014, the law requires insurance companies to accept all applicants regardless of pre-existing medical problems. But it also allows them to charge smokers up to 50 percent higher premiums — a way for insurers to ward off bad risks.
For an older smoker, the cost of the full penalty could be prohibitive.
Premiums for a standard "silver" insurance plan would be about $9,000 a year for a 64-year-old non-smoker, according to the online Kaiser Health Reform Subsidy Calculator. That's before any tax credits, available on a sliding scale based on income.
For a smoker of the same age, the full 50 percent penalty would add more than $4,500 to the cost of the policy, bringing it to nearly $13,600. And new tax credits available to help pay premiums cannot be used to offset the penalty.
"As it gets closer there is more information available," Bartel said. "I have not heard of any that are going the maxim. For many companies, health insurance is a large part of their expense. … If employees saw the true number of what employers are paying … I think many, many would be surprised to see what the company is paying in addition to the wage."
— The Associated Press contributed to this report.