Should drinkers pay more for health insurance?

On By Littum

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Health insurance companies are allowed to charge more in monthly premiums for smokers than what they charge for people who do not use tobacco.

With the growing body of medical evidence linking alcohol to cancer and other deadly diseases, could insurance plans raise premiums for people who drink?

Surgeon General Vivek Murthy wants a new warning added to alcohol that will warn drinkers of links to cancer. Could that open the door to health insurance companies charging more for drinkers’ health insurance?

It would be “highly unlikely” for Congress to pass legislation that would allow health insurers to charge higher premiums to people who consume alcohol, said Sabrina Corlette, co-director of the Center for Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy.

But others see opportunities for a different approach. Employers that provide health insurance benefits to most working-age Americans and their families may consider tailoring workplace “wellness programs” to reward those who abstain from alcohol, said Larry Levitt, executive vice president for health policy at KFF, a non-profit health policy organization.

“For an employer, it lends some credibility to the argument that we should reduce alcohol,” Levitt says, if the surgeon general — who is essentially the nation’s arbiter of health — says this about alcohol use.

Why are health insurance companies allowed to charge tobacco users more?

Under the Affordable Care Act, health insurance plans cannot charge people more based on medical history or gender. However, the 2010 law allows health insurance companies to adjust premiums based on age, geography and tobacco use.

The Obama administration passed a rule that allowed health insurance plans to charge up to 50% more for someone who smokes or uses tobacco. No other behaviors, including alcohol consumption, were singled out under the federal law, although insurance plans may offer incentives for healthy behaviors.

Some states do not allow health insurance companies to charge more for tobacco use. California, Connecticut, the District of Columbia, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, Vermont and Virginia ban tobacco surcharges, according to KFF. Other states limit tobacco allowances. In Colorado, health insurance companies cannot charge tobacco users more than 15% compared to non-tobacco users.

Patient groups have expressed concern that tobacco surcharges could prevent people from getting affordable coverage. The American Heart Association, for example, does not support tobacco supplements and encourages access to free tobacco cessation services.

Corlette said affordable health insurance remains essential for people seeking to overcome addiction.

“If you want someone to stop a bad behavior, whether it’s tobacco use or substance abuse, the best way to do that is not to make their health insurance unaffordable, but rather to make sure they can access to the preventive care and health services that they need to address the addiction,” Corlette said.

Could employer wellness programs charge drinkers more for insurance?

The nondiscrimination rules state that employer-sponsored insurance cannot vary the cost based on an employee’s health. But there is an exception that allows some employees to cut their insurance premiums, according to Levitt.

Employers that offer health insurance to workers and their families offer wellness programs that help workers quit smoking, lose weight, or change unhealthy behaviors.

The programs are intended to reward workers for healthy lifestyle choices and allow employers to offer financial incentives worth up to 30% of health insurance costs. Although the programs are not supposed to penalize employees who do not participate, those workers may find themselves paying hundreds or thousands more in excess or premiums according to KFF.

“The surgeon general’s report potentially accelerates the conversation about the health effects of drinking,” Levitt said.

Some employers can “see the rationale” for tailoring wellness programs to address alcohol use, said James Gelfand, president and CEO of the ERISA Industry Committee, which represents companies that offer employee benefits.

But he said such programs require nuance. Before raising premiums for tobacco use, employers must offer people an opportunity to quit smoking through counseling, nicotine replacement gum or patches, or other smoking cessation treatments. Similar options would be necessary for a company seeking to encourage workers to stop drinking.

“You have to give somebody an alternative — something they can do,” Gelfand said. “You can’t just say, ‘If you smoke, you pay 50% more’.”

Workplace wellness programs often encourage employees to get an annual physical, with doctors typically asking patients if they drink alcohol. A doctor may recommend follow-up steps or treatment.

If the surgeon general’s warning prompts doctors to be “much more proactive about this, that could in turn lead to insurance companies being more proactive,” Gelfand said.

Are we ready to financially punish drinking?

Congress is unlikely to change the Affordable Care Act to specifically allow insurers to raise rates for alcohol drinkers, Levitt said.

Although Levitt said there is a scientific and cultural consensus that smoking is bad for people, “we’re not there on alcohol.”

“Our approach to smoking has been decades in the making, building scientific evidence that smoking causes cancer and other diseases and launching widespread efforts to curb smoking,” he said. “In general, you can’t smoke in a restaurant or at workplaces, on public transport anymore. This obviously doesn’t apply to drinking.”

Murthy said alcohol directly contributes to 100,000 cancer cases and 20,000 related deaths each year in the United States. Meanwhile, smoking and passive smoking lead to more than 480,000 deaths each year according to the Centers for Disease Control and Prevention.

For millennials, Gen Xers and baby boomers, drinking is “ingrained in the culture to such an extent that it would probably be impossible to change behavior for many people,” Gelfand said.

Many adults are convinced there are benefits to drinking red wine in moderation, Gelfand said.

But studies show that drinking rates are much lower among Generation Z – young adults just entering the workforce. Given these demographic shifts, it may be easier to require drinkers to pay higher rates over time, Gelfand said.