Health insurers are allowed to charge smokers more in monthly premiums than what they charge people who don’t use tobacco.
With the growing body of medical evidence linking alcohol to cancer and other deadly diseases, could insurance plans raise premiums for people who drink?
Surgeon General Vivek Murthy wants a new warning added to alcohol that would alert drinkers about links to cancer. Could that open the door for health insurance companies to charge more for drinkers’ health insurance?
It would be “highly unlikely” for Congress to pass legislation that would allow health insurers to charge higher premiums to people who consume alcohol, said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy.
But others see possibilities for another approach. Employers who provide health insurance benefits for most working-age Americans and their families might consider tailoring workplace “wellness programs” to reward those who abstain from alcohol, said Larry Levitt, executive vice president for health policy at KFF, a nonprofit health policy organization.
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“For an employer, having the surgeon general – who is essentially the nation’s arbiter of health – say this about alcohol use gives some credibility behind the argument that we should be reducing alcohol,” Levitt said
Why are health insurance companies allowed to charge tobacco users more?
Under the Affordable Care Act, health insurance plans can’t charge people more based on medical history or gender. However, the 2010 law allows health insurers to adjust premiums based on age, geography and tobacco use.
The Obama administration adopted a rule that allowed health insurance plans to charge up to 50% more for someone who smokes or uses tobacco. No other behavior, including alcohol consumption, was singled out under the federal law, though insurance plans can offer incentives for healthy behavior.
Some states don’t allow health insurance companies to charge more for tobacco use. California, Connecticut, the District of Columbia, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, Vermont and Virginia prohibit tobacco surcharges, according to KFF. Other states limit tobacco surcharges. In Colorado, health insurers can’t charge tobacco users more than 15% compared with non-tobacco users.
Patient groups have raised concerns that tobacco surcharges might prevent people from getting affordable coverage. The American Heart Association, for example, does not support tobacco surcharges and urges access to free tobacco cessation services.
Corlette said affordable health insurance remains crucial for people seeking to overcome addiction.
“If you want somebody to discontinue a bad behavior, whether it’s tobacco use or abusing other substances, the best way to do that is not to make their health insurance unaffordable but rather to ensure they can access the preventive care and health care services that they need to address the addiction,” Corlette said.
Could employer wellness programs charge drinkers more for insurance?
Nondiscrimination rules say employer-sponsored insurance can’t vary costs based on an employee’s health. But there is an exception that allows some employees to cut down their insurance premiums, according to Levitt.
Employers who provide health insurance to workers and their families offer wellness programs that help workers stop smoking, lose weight or change unhealthy behaviors.
The programs are meant to reward workers for healthy lifestyle choices and allow employers to offer financial incentives worth up to 30% of the cost of health insurance. Though the programs aren’t supposed to penalize employees who don’t participate, those workers could find themselves paying hundreds or thousands more in deductibles or premiums, according to KFF.
“The surgeon general’s report potentially accelerates the conversation over the health effects of drinking,” Levitt said.
Some employers might “see the justification” for tailoring wellness programs to address alcohol consumption, said James Gelfand, president and CEO of the ERISA Industry Committee, which represents companies that provide employee benefits.
But he said such programs require nuance. Before raising premiums for tobacco use, employers must offer people an opportunity to quit smoking through counseling, nicotine-replacement gum or patch or other smoking cessation treatments. Similar options would be required for a company that seeks to encourage workers to quit drinking.
“You have to give somebody an alternative − something they can do,” Gelfand said. “You can’t just say, ‘If you smoke, you pay 50% more.'”
Workplace wellness programs often encourage employees to get an annual physical, during which doctors typically ask patients whether they drink alcohol. A doctor might recommend follow-up steps or treatment.
If the surgeon general’s warning causes doctors to be “much more proactive about this, that in turn could lead to insurers becoming more proactive,” Gelfand said.
Are we ready to financially penalize drinking?
It’s unlikely Congress will modify the Affordable Care Act to specifically allow insurers to raise rates for alcohol drinkers, Levitt said.
Though Levitt said there’s a scientific and cultural consensus that smoking is bad for people, “we’re not there on alcohol.”
“Our approach to smoking has been decades in the making, building the scientific evidence that smoking causes cancer and other diseases and putting in place widespread efforts to restrict smoking ,” he said. “Generally, you can’t smoke in a restaurant or in workplaces, on public transportation anymore. That’s obviously not true for drinking.”
Murthy said alcohol directly contributes to 100,000 cancer cases and 20,000 related deaths each year in the U.S. Meanwhile, smoking and secondhand smoke exposure leads to more than 480,000 deaths each year, according to the Centers for Disease Control and Prevention.
For millennials, Gen Xers and baby boomers, drinking is “ingrained in the culture to such a degree that it would be probably impossible to change behavior for many people,” Gelfand said.
Many adults are convinced there are benefits to drinking red wine in moderation, Gelfand said.
But surveys show drinking rates are much lower among Generation Z − young adults just entering the workforce. Given these demographic shifts, requiring drinkers to pay higher rates “might be easier to do over time,” Gelfand said.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.