Under the Affordable Care Act, insurance companies can charge smokers and other tobacco users up to 50 percent more than non-smokers for a health insurance policy. But where do e-smokers fit in?
E-cigarettes are battery-operated nicotine inhalers that consist of a rechargeable lithium battery, a cartridge called a cartomizer and an LED that lights up during each puff. Although they contain no tobacco, the U.S. Food and Drug Administration plans on regulating them like cigarettes and cigars. This, it turns out, is complicating things for insurance companies.
While the ACA allows insurance companies to charge higher premiums to smokers and other tobacco users, the definition of a “smoker” is unclear under the law.
One way insurance companies could deal with e-cigarettes is to lump them in with tobacco products – a move that would subject so-called vapers to the same higher premiums as cigarette smokers. The companies could also swing the other way and decide to cover the cost of e-cigarettes as a means to help people quit smoking, despite a lack of evidence that the devices work as well as a patch. Insurers could also choose to ignore e-cigs altogether.
”The Affordable Care Act does not specify e-cigarette use for purposes of cessation coverage or tobacco surcharge application,” the American Cancer Society said in a statement to ABC News. “The lack of clarity may allow health plans to try to add the surcharge for e-cigarettes.”
If and when the FDA regulation of e-cigarettes goes into effect, insurance companies could change any of their current policies to reflect the agency’s direction. In the meantime, most companies claim they have too little experience with the devices to have a position, according to an informal poll by the National Association of Health Underwriters.
Carrie McLean, director of customer care for the online health insurance brokerage eHealth, said some insurers are telling their agents to add a smoking surcharge for those who vape.
“If a consumer indicates they use e-cigarettes, the carriers are expecting them to be uprated just as if they are a smoker,” she said, noting that consumers aren’t actually asked about the type of tobacco products they use during the health insurance application process – just whether they use them at all.
Related: E-cigarette Poisoning On the Rise
America’s Health Insurance Plans, an association which represents most of the country’s large health insurance companies, recommends that agents ask about regular tobacco use in the last six months and the most recent use. However, if a consumer were to ask for clarification about whether or not e-cigarettes count as tobacco use, then an agent is obliged to add the surcharge, McLean said.
“The problem arises because most people fill out their applications online and, as of now, most applications don’t ask specifically about e-cigarettes,” McLean said. “Consumers are left to decide on their own whether or not they consider themselves a tobacco user.”
It’s an important question to settle, as the price differential can be significant.