Claire McAndrew

January 23, 2014

Tobacco Rating: Consumer Concerns and Steps for

Advocacy

Families USA2014

• 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

What is Tobacco Rating?

Families USA2014

• 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

Federal Rules (45 CFR 147.102)

Families USA2014

• 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)

Concerns for Consumers

Families USA2014

Smoking by Income (2008)

Families USA2014

• 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

Tobacco and Mental Health

Families USA2014

• 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

Policy Solutions

Families USA2014

• 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.

Policy Solutions

Families USA2014

• 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

Policy Solutions

Families USA2014

• 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!

Advocacy

Families USA2014

• Contact: Claire McAndrew: cmcandrew@familiesusa.org

202-628-3030• Tobacco rating: Issues for Consumers

http://familiesusa2.org/assets/pdfs/Tobacco-Rating-Issues-for-Consumers.pdf

• Tobacco Rating: State Solutions http://familiesusa2.org/assets/pdfs/Tobacco-Rating-State-Solutions.pdf

Further Resources