Our legal expert contributor John Banzaf has a good idea for healthcare reform which both sides could agree on – we should distingush between preventable medical conditions like a smoker surcharge versus someone who gets a disease which is impossible to prevent regardless of diet or habits. See his latest column below.
While it’s natural to wish to protect people from being forced to pay much higher health insurance premiums because of existing conditions which they can no longer control, it’s quite another to reward people who deliberately cause preventable diseases which unnecessarily cost taxpayers hundreds of billions of dollars a year, argues public interest law professor John Banzhaf.
Healthcare reformers should be careful to distinguish pre-existing from preventable medical conditions, and not continue to encourage the latter by forcing taxpayers to subsidize them, and not impose personal responsibility on those causing preventable medical conditions, he says.
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While many would argue that it might be unfair to raise health insurance rates on those who suddenly suffer a heart attack, stroke, or are diagnosed with cancer, no such arguments can be made regarding people who deliberately continue to engage in activities very likely to cause them one of these – or other – deadly and very expensive conditions, he contends.
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 is now being 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.).
Since the Congressional Budget Office estimates that Obamacare would cost about $1.34 trillion over the next decade – just under $140 billion/yr – reducing smoking could cover the entire cost of any new health plan – including many times over the costs attributable to pre-existing conditions – without using taxpayers’ money, or imposing higher insurance rates on the great majority of Americans who do not smoke.
Banzhaf’s several legal actions have forced the federal government to rule that companies can legally require smokers to pay more for health insurance – as they have long done for life insurance, and in some cases home and car insurance – but Obamacare artificially restricted this surcharge to only 50%.
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 this artificial cap is based on politics rather than science and hard data, and many insurance companies would like the ability, under our free enterprise system, to base their smoker surcharge on their own actuarial data, rather than on a government imposed subsidy to smokers.
Thus, to truly incorporate personal responsibility, and permit the marketplace to make the kind of pricing determinations it does best, 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.