Tobacco Rating: Consumer Concerns and Steps for Advocacy Claire Mc. Andrew January 23, 2014
What is Tobacco Rating? • ACA allows individual and small group premium surcharge of up to 50% for individuals who use any kind of tobacco: • 4 or more times per week, on average • Within no longer than the past 6 months, based on when tobacco was last used • Does not apply to those under 18 • Exception for ceremonial/ religious use Families USA 2014
Federal Rules (45 CFR 147. 102) • False responses: Insurer can recoup surcharge; can’t rescind policy or deny renewal, etc. • Small group: Can only tobacco rate if wellness program is available but individuals do not participate • Federal rules are a ceiling, not a floor: States can be more protective Families USA 2014
Concerns for Consumers • Lack of Evidence • Affordability: Credits Don’t Help – John’s premiums would be $600/month. But he smokes. He can be charged: • $600 + $300 tobacco surcharge= $900 – Say Jim earns 150% FPL. Premium credits allow him to buy pay $57/ month ($690/ year) for coverage. (4% of income) – With tobacco rating, he has to pay a 50% surcharge on the full premium: – $57 + $300=$357/month (24% of income) Families USA 2014
Smoking by Income (2008) Families USA 2014
Tobacco and Mental Health • Adults with mental illnesses are more likely to smoke cigarettes and less likely to quit than people without mental illnesses. • 36 percent of people with mental illnesses smoke, compared with 21 percent of those without mental illnesses. Centers for Disease Control and Prevention, 2013 Families USA 2014
Policy Solutions • Eliminate or Reduce Tobacco Rating – Rating ban: CA, CT, DC, MA, NY, RI, VT – Tobacco rating restriction • AR 1. 2: 1 • CO: 1. 15: 1 • KY: 1: 4: 1 Families USA 2014
Policy Solutions • Reduce Look-Back Period for Tobacco Use – Instead of counting tobacco use in last 6 months, count last 3, or last 1, etc. – Increase frequency of tobacco use that defines a tobacco user – Instead of 4 times a week, could define as 6 or 7 times a week on average. Families USA 2014
Policy Solutions • Eliminate tobacco rating for those who quit – If someone quits mid-plan year, require premium adjustment – Eliminate tobacco rating for those who enter cessation programs or services – In individual market, eliminate for people who enter cessation programs or services through their insurer, employer, or in the community Families USA 2014
Advocacy • Information gathering • Partner with public health groups (American Cancer Society, tobacco prevention coalitions, etc. ) • Targets: Insurance commissioner, marketplace board/ director, legislators • Federal work: Rules indicate plans for further work on definition of tobacco user; consumer testing on tobacco question: jacob. ackerman@cms. hhs. gov • Educate, then advocate! Families USA 2014
Further Resources • Contact: Claire Mc. Andrew: cmcandrew@familiesusa. org 202 -628 -3030 • Tobacco rating: Issues for Consumers http: //familiesusa 2. org/assets/pdfs/Tobacco-Rating. Issues-for-Consumers. pdf • Tobacco Rating: State Solutions http: //familiesusa 2. org/assets/pdfs/Tobacco-Rating-State -Solutions. pdf Families USA 2014
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