Health Insurance Surcharges On Smoking

In most cases, insurance companies cannot ask you about your medical history when you apply for a policy. One thing they can ask you, though, is whether you smoke and how often. If you vape, smoke, or even chew tobacco regularly, you will face health insurance surcharges of up to 50%. While insurance companies can no longer base premiums on your medical history or reject you due to pre-existing conditions, they can adjust premiums based on different factors; tobacco use is one of these factors. They charge this “tobacco surcharge” to try and deter plan members from smoking, because smoking-related chronic conditions like COPD lead to higher medical costs.

What Is Considered Tobacco Use?

caucasian man smoking a vape pen with a lot of smoke coming out of it.
Insurance companies charge a surcharge for any form of tobacco use including vaping.

Insurance companies charge a tobacco surcharge for using any tobacco product, including vape juice, cigarettes, cigars, chewing tobacco, snuff, e-cigarettes, and pipes. Using any of these products 4 or more times a week within the past 6 months is considered tobacco use. The only time tobacco use is excluded is if tobacco is used for ceremonial or religious purposes by groups such as Native Americans. 

Insurance companies rely on the honor system with their health insurance applications. They will ask if you are a smoker and if you have used tobacco products in the last 6 months. Be aware that if you do not tell the truth, you risk being charged with insurance fraud, which is a misdemeanor and could result in probation, community service, or time in jail. 

How Much Is The Surcharge?

The ACA allows a 1.5:1 ratio for tobacco use, which means that individual and small-group health insurers can charge tobacco users up to 50% more for their monthly premiums than they charge for non-tobacco users. A recent study of CMS’ public files on the health insurance marketplace for 2015 to 2019 found that tobacco users paid more in premiums than non-users on the ACA marketplace. They also found that their premiums continued to rise every year.

“The group that saw the biggest price increase was middle-aged tobacco users. Forty-five year old tobacco users on the lowest cost marketplace plan saw a 125% increase in premiums between 2015 and 2019. The 27-year-old tobacco user’s premium for that plan rose by 113% from 2015 to 2019 and 64-year-olds saw a 95% rise.”

States do not all have the same tobacco surcharge and rating rules:

new york and new jersey on a map
Some states like New York and New Jersey prohibit tobacco surcharges.

 States that prohibit tobacco surcharges: 

  • California
  • Massachusetts
  • New Jersey
  • New York
  • Rhode Island 
  • Vermont
  • Connecticut (only for health plans sold on the state’s health insurance exchange)

Washington D.C. also prohibits tobacco surcharging.

States that allow a surcharge of less than 50%:

  • Arkansas – 20%
  • Colorado – 15%
  • Kentucky – 40%

In all other states, insurance companies charge the maximum 50% surcharge for monthly premiums compared to non-smokers’ premiums. The smoking surcharge does not qualify for ACA premium subsidies, which means you will pay the cost of your premium entirely out of pocket. If you were a tobacco user, but have been tobacco free for at least 6 months, then you can update your information and adjust your rates for the following year.

Need Help?

Whether you currently use tobacco products, have recently quit, or are on the road to quitting, health insurance is important to have. Tobacco products can cause many health problems, and it is better to be insured than to go without insurance and risk having medical bills pile up. If you are looking for health insurance, are a tobacco user, and are worried about the costs, EZ.Insure can help. We will evaluate the costs, compare plans in your area in minutes, and find you a plan that will save you money. To instantly compare free quotes, simply enter your zip code in the bar above, or to speak directly to a licensed agent, call 888-350-1890.

About The Author: Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.
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