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Virginia lawmakers move to lower insurance costs for tobacco users

Critics of tobacco surcharges in insurance premiums say they are ineffective at helping people quit and cause some smokers to drop their health care coverage altogether.

RICHMOND, Va. (CN) — Organizations aiming to cut the number of tobacco users and expand health insurance coverage in Virginia have a reason for optimism as a bill barring insurance companies from charging higher premiums for smokers nears the finish line. 

Delegates Karen Greenhalgh, a Virginia Beach Republican, and Patrick Hope, a Democrat from Arlington, introduced House Bill 1375 in the Virginia House of Delegates, while an identical bill, Senate Bill 1011, was introduced in the Virginia Senate by Senator John S. Edwards, a Roanoke Democrat.

"It's a good bill that the Joint Commission on Health Care has identified as a simple and practical method of both expanding the pool of insured Virginians while simultaneously lowering premiums across the board," Greenhalgh said in a statement to Courthouse News.

The bills await Republican Governor Glenn Youngkin's approval after passing through both bodies of the General Assembly with minimal trouble. The legislation changes state code to bar health insurance providers from charging more in premiums based on a customer's tobacco use.    

"The tobacco surcharge is actually a barrier to insurance for individuals with low incomes who don't have chronic illnesses already," Greenhalgh said in a subcommittee meeting in January. "Younger, healthier tobacco users will be inclined to not take the coverage." 

Organizations like the American Cancer Society and the American Lung Association spoke in favor of the bills. 

"Tobacco surcharges represent a punitive practice that has continuously proven ineffective at curbing tobacco use and helping people quit," Brian Donohue, Virginia government relations director for the American Cancer Society Cancer Action Network, said in an email. "If Virginia state leaders are committed to limiting tobacco's impact on our communities and, with it, improving the health of their constituents, then we must focus on enacting policies that are proven to reduce tobacco use, like raising tobacco taxes and increasing funding for fact-based tobacco prevention and cessation programs, like Virginia's Tobacco Control Program."

Although the Affordable Care Act bars insurance companies from basing premiums on an applicant's medical history, it allows individual and small-group health insurers to adjust premiums based on tobacco use. Designed initially to incentive smokers to quit, the tobacco surcharges have served a different purpose. Critics of them argue that tobacco users are likely to opt out of health care coverage entirely rather than quitting due to the surcharge. 

"Surcharges are not necessarily discouraging people from using tobacco," Aleks Casper, director of advocacy for the American Lung Association, said in a phone interview. "We know that nicotine is a powerful addiction." 

Tobacco cessation services are offered to those with health insurance, but for those who struggle financially, the surcharge can stop them from receiving those services. 

"We want to make it as easy as possible for smokers or people who use tobacco to receive evidence-based assistance to help them quit," Casper said. "Having access to care is really important."

Some tools available to tobacco users looking to quit using health care include access to seven Food and Drug Administration-approved medications and individual and group counseling. 

"The data shows that when we charge surcharges, the people who need the services aren't necessarily getting them," Casper said. 

Under current Virginia law, a health carrier may charge premium rates up to 1.5 times higher for a tobacco user than for a non-tobacco user. The surcharge can cost tobacco users thousands more for health insurance, according to a California study that determined an average tobacco user could end up paying 18.7% of their annual income in premiums because of the surcharge.

The idea for the bill came from Virginia's 2021 Joint Commission on Health Care report, which recommended it to help with insurance affordability for Virginians. The legislations represents a small number of bills that have received bipartisan support this session. Casper said both parties are interested in making Virginia healthier. 

"I think in Virginia what our lawmakers are really looking at is a way to make Virginia a healthier place," Casper said. "It's a way to increase access to care for Virginians." 

According to data from the Centers for Disease Control and Prevention's 2021 Behavioral Risk Factor Surveillance System, 12% of Virginia adults smoke. Over 22% of Virginia high schoolers use tobacco products, according to the 2019 Youth Risk Behavior Surveillance System. With over 10,000 deaths linked to smoking yearly, the state spends over $3 billion in smoking-related health care costs.

The state is home to tobacco industry giants Altria, the parent company of Phillip Morris, the maker of Marlboro cigarettes, and the U.S. Smokeless Tobacco Company, the producers of Copenhagen and Skoal dipping tobacco. 

Virginia ranked among the country's worst in terms of tobacco use prevention policies in the ALA's 2022 report card. The state received F's in tobacco prevention and cessation funding, tobacco taxes, smoke-free air and flavored tobacco products categories, while getting a D for access to cessation services. 

The identical House and Senate bills were introduced in last year's session, where they passed through the General Assembly but were vetoed by Youngkin. 

"This legislation would force insurance companies to recover costs associated with tobacco users by raising premiums on non-tobacco users," Youngkin gave as his reason for vetoing the bills last year. "The ability to reduce premiums by quitting smoking is also a valuable incentive to encourage healthier habits." 

According to one lobbyist representing a national health organization, there is "peace in the valley" regarding the issue this session, and legislators are hopeful Youngkin will sign the legislation this time.

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