The Washington Post has just reported that “Single-Payer Health Care Would Have an Astonishingly High Price Tag,” and in California single-payer health insurance would cost a whopping $400 billion annually, more than twice the current state budget of $180 billion.

Earlier, it was estimated that such a system for New York would require doubling or even quadrupling the state’s tax burden, and both Vermont and Colorado gave up because the costs were too high.

Health care costs
peter-facebook / Pixabay

But the entire cost of Obamacare could be covered if a simple change were made, says public interest law professor John Banzhaf. Banzhaf not only provided the simple answer and analysis, but also helped persuade the National Association of Insurance Commissioners [NAIC] to adopt and propose it, and the U.S. government to approve it, twice, before the adoption of Obamacare.

The Congressional Budget Office estimated that Obamacare would cost about $1.34 trillion over the next decade – just under $140 billion per year – most of it paid, directly or indirectly, by working Americans. But this is dwarfed by the health care costs imposed on everyone from one major high-risk activity which only a small percentage of American adults (about 15%) continue to engage in: smoking.

The American Lung Association estimates that smoking costs the American economy about $322 billion a year. This includes over $175 billion in direct medical care for adults, but does not include the huge increased indirect costs such has higher numbers of complications from surgery, delayed healing, etc.

Most of this alarming cost – much more than twice the entire cost of Obamacare – is borne by nonsmoking taxpayers in the form of higher taxes (for Medicare, Medicaid, and other programs) as well as ever-escalating health care costs (in the form of higher premiums, changing deductibles, etc.).

So reducing smoking could cover the entire cost of any new health plan, without using taxpayers’ money, or imposing higher insurance rates on the great majority of Americans who do not smoke.

One way to help do this would be to introduce true personal responsibility into health care reform by permitting insurers to have smokers bear their fair share of the costs they now force upon others. This could slash the number of smokers, and the huge medical care costs they impose on all of us, says Banzhaf.

But even if this did not help persuade a single smoker to quit, it would be fairer than continuing to impose those unnecessary costs on the great majority of Americans who do not smoke, argues Banzhaf.

It could be done by simply permitting – but not necessarily requiring – health insurance companies to do what life insurance (and some car and home insurance) companies have long done without any serious objections – charge proportionately higher rates for these who smoke.

Dozens of studies have shown that providing smokers with a strong financial incentive to quit is generally far more effective than spending hundreds of millions of taxpayer dollars annually on anti-smoking messages, warnings on cigarette packs and in cigarette ads, etc. Indeed, the Wall Street Journal, the British Medical Journal, and others reported that the 50% smoker surcharge now available under Obamacare could slash smoking rates by one half.

But to truly incorporate personal responsibility, Congress would have to remove the artificial cap of 50% on the smoker surcharge, no longer require some insurers to offer smokers a simple alternative to quitting (e.g., listen of a few lectures), and not permit states to override the judgment of insurance companies which increase smoker premiums based upon their own hard actuarial data, says Banzhaf.