Claire McAndrew January 23, 2014

1. Claire McAndrew January 23, 2014 Tobacco Rating: Consumer Concerns and Steps for Advocacy

2. What is Tobacco Rating? Families USA 2014 • 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

3. Federal Rules (45 CFR 147.102) Families USA 2014 • 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

4. Concerns for Consumers Families USA 2014 • 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)

5. Smoking by Income (2008) Families USA 2014

6. Tobacco and Mental Health Families USA 2014 • 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

7. Policy Solutions Families USA 2014 • 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

8. Policy Solutions Families USA 2014 • 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.

9. Policy Solutions Families USA 2014 • 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

10. Advocacy Families USA 2014 • 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!

11. Further Resources Families USA 2014 • 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