Older smokers are likely to benefit from Obama’s Affordable Care Act and could save about $4,500 a year on premiums, due to a computer glitch that limits the penalties insurers are allowed to charge.
A June 28 report by the Department of Health and Human Services
discovered the smokers’ glitch, which could take the Obama
administration a year to fix, AP reports. Even though the law
allows insurers to charge smokers up to 50 percent higher
premiums, the system glitch limits these penalties and
particularly benefits older Americans who smoke.
“Because of a system limitation … the system currently
cannot process a premium for a 65-year-old smoker that is …
more than three times the premium of a 21-year-old smoker,”
the industry guidance said. If an insurance company tries to
charge a smoker higher premiums, “the submission of the
(insurer) will be rejected by the system,” the guidance
added.
When President Obama’s signature Affordable Care Act is
implemented in 2014, insurance companies will be required to
accept all applicants, regardless of their medical history,
lifestyle or any pre-existing conditions. A 64-year-old
non-smoker would pay about $9,000 a year for a standard “silver”
insurance plan. A 50 percent penalty on premiums would add more
than $4,500 to their annual health insurance costs, bringing the
total to nearly $13,600.
But the glitch prevents insurers from charging older customers
more than three times what they charge the youngest. In order for
the system to approve the insurance plans, a young smoker and an
old smoker would have to be charged the same penalty.
Initially, health insurance experts predicted that companies
would charge young smokers lower penalties and older smokers
higher penalties.
“Generally a 20-year-old who smokes probably doesn’t have much
higher health costs than someone who doesn’t smoke in any given
year,” said Larry Levitt, an insurance market expert with the
nonpartisan Kaiser Family Foundation. “A 60-year-old is
another story.”
The Obama administration is now suggesting limits on penalties
for smokers of all ages. The Department of Health and Human
Services suggested a 20 percent penalty, which could be
significantly less for older smokers who would have otherwise
been forced to pay 50 percent.
A 64-year-old smoker with a 20 percent insurance penalty would be
paying about $10,900 a year, rather than the $13,600 they would
pay under a 50 percent penalty. Younger smokers, on the other
hand, would most likely be paying more than they normally would.
“It’s going to throw cold water on efforts to get younger
people to sign up,” Larry Levitt, an insurance market expert,
told AP.
On July 2, the Obama administration unexpectedly announced a
one-year delay of the provision that would mandate larger
employers to provide coverage for their workers or pay hefty
fines. The administration is preparing the launch of the health
insurance marketplace on October 1, but news of
delays and glitches has concerned health industry experts and
consultants.
In recent weeks, new data and reports have discovered that
Obamacare would increase
healthcare premiums in California by up to 146 percent and
penalize
nearly half a million Native Americans who would no longer be
“Indian enough” for eligibility at federally-funded health
clinics. And with younger smokers set to pay significantly more
and older smokers able to get away paying less, flaws of
Obamacare have once again been highlighted, just a few months
before it goes into effect.
“This was an administration that was telling us everything was
under control,” health care industry consultant Robert
Laszewski told AP. “Everything was going to be fine. Suddenly
this kind of stuff is cropping up every few days.”
Republished with permission from: RT