State policies limiting premium surcharges for tobacco and their impact on health insurance enrollment

Abstract

Objective: The Affordable Care Act allows insurers to charge up to 50% higher premiums to tobacco users, making tobacco use the only behavioral factor that can be used to rate premiums in the nongroup insurance market. Some states have set more restrictive limits on rating for tobacco use, and several states have outlawed tobacco premium surcharges altogether. We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. Study Design: We compared insurance enrollment in states that did and did not allow tobacco surcharges, using a difference-in-difference approach to compare the policy effects among smokers and nonsmokers. We also used geographic variation in tobacco surcharges to examine how the size of the surcharge affects insurance coverage, again comparing smokers to nonsmokers. Data Collection: We linked data from two components of the Current Population Survey—the 2015 and 2019 Annual Social and Economic Supplement and the Tobacco Use Supplement, which we combined with data on marketplace plan premiums. We also collected qualitative data from a survey of smokers who did not have insurance through an employer or public program. Principal Findings: Allowing a tobacco surcharge reduced insurance enrollment among smokers by 4.0 percentage points (P =.01). Further, smokers without insurance through an employer or public program were 9.0 percentage points less likely (P