Kokomo Tribune; Kokomo, Indiana

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July 9, 2013

Glitch may limit penalties for smokers in new health care law

(Continued)

In that case the premium for a 64-year-old would be about $10,900, a significant cut from the $13,600 if insurers charged the full penalty.

It's unclear what insurance companies will do. A spokesman for America's Health Insurance Plans, the main industry trade group, said insurers were aware of the issue and expected the administration would fix it eventually.

Another workaround for the companies would be to charge the full penalty to both younger and older smokers. In that case, there wouldn't be any savings for older smokers, and younger ones would see a big price shock.

Levitt said he suspects insurers would keep the penalties low to sign up more young people. Laszweski said he thought they would do the opposite.

"It's going to throw cold water on efforts to get younger people to sign up," he said.

Workers covered through job-based health plans would be able to avoid tobacco penalties by joining smoking cessation programs because employer plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually.

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