Some Iowans blowing smoke about tobacco use

The Affordable Care Act's architects may have found a way to make Iowa's smoking-rate statistics drop by more than half: Tell people that if they admit to tobacco use, they'll have to pay substantially more for health insurance.

In anonymous national surveys, 18 percent of Iowa adults say they smoke regularly. But when the state's dominant health insurance company used new federally required language to ask applicants whether they regularly use tobacco, only 7 percent 'fessed up.

Tobacco use is one of the few things for which health insurers are still allowed to charge extra. Starting this year, the federal Affordable Care Act barred carriers from imposing higher premiums for most other factors, such as gender or pre-existing health problems. The law allows insurers to charge up to 50 percent more for individual insurance policies sold to people who say they're regular tobacco users. But the law defines tobacco use in a way that provides lots of wiggle room.

The issue mainly affects people who buy their own coverage instead of obtaining it through their employers or a government program.

Wellmark Blue Cross and Blue Shield, which sells more than three-quarters of the individual health insurance policies in Iowa, is charging about 15 percent extra to admitted tobacco users. But even that amount appears to be inducing some applicants to blow smoke about their habits.

Wellmark competitor CoOportunity Health imposes a 49 percent smokers' surcharge on its individual insurance policies. Just 5 percent of its applicants have been answering yes to the tobacco-use question.

There are several possible explanations for these figures, but widespread dishonesty appears to be one of the strongest.

West Des Moines insurance broker Jesse Patton said he has had customers admit they're smokers, then change their stories once they see how much more their premiums would cost. "They're like, 'You know what, Jesse? Come to think of it …,' " Patton recalled. Then they tell him they don't smoke or chew tobacco all that often.

Patton, president of the Iowa Association of Health Underwriters, said he's warned customers that lying on an insurance application could be considered fraud. But the customers seem to understand that the insurers would be hard-pressed to prove such a case, he said.

Part of the problem is the way the federal law worded the question that insurers are allowed to ask, Patton said. The question isn't whether applicants use tobacco at all; it's whether applicants have used tobacco on average at least four times a week in the past six months. Patton said it's far too easy to fudge an answer to that question. Four or more times a week? On average? Who's counting?

David Brown, Wellmark's executive vice president, said his company tried to set its tobacco-use surcharge at a reasonable level. "Obviously, smokers are more expensive to care for, but if you price it too high, you're just encouraging people to lie," he said.

Brown said the 7 percent of Wellmark applicants who identified themselves as regular tobacco users was "in the ballpark" of what the company expected. The insurer has little ability or inclination to double-check whether applicants were truthful, he said.

"We don't have drones," he joked.

Cliff Gold, chief operating officer of CoOportunity Health, said several factors muddy the statistics.

For example, he said, his company asks whether each person who would be covered by a new insurance policy uses tobacco. If applicants are shopping for family policies, they are asked whether their children smoke or chew tobacco, he said. Even if the parents were trying to be truthful, many of them probably wouldn't know if their teenage or young-adult offspring were smoking on the sly, he said.

Gold agreed with Patton that the federally-specified question is poorly worded. "It's virtually impossible to police it," he said. Even if an insurer could demand a blood test for nicotine, a customer whose test came back positive could just say he smoked less than four times per week, he said.

Given how easy it would be to lie on the tobacco question, Gold said, "I'm actually amazed at the number of people who have owned up."

He noted that confessed smokers can still qualify for the lower, non-smoker premiums if they make an effort to quit. For CoOportunity customers, that means agreeing to watch online videos and then take a quiz about them. If they're still smoking when it's time to re-enroll, they could agree to watch the videos again.

Even though it's relatively easy to avoid, the insurance-premium surcharge amounts to one more thing nudging smokers toward quitting, he said. That could help save money and lives taken by cancer, heart disease and other ailments caused by smoking.

The other major carrier selling individual health insurance policies in Iowa, Coventry Health Care, declined to say how many of its applicants have admitted being regular smokers.

Insurance Commissioner Nick Gerhart said he's warned Iowans to answer truthfully on their health insurance applications. The Affordable Care Act has tightened rules on when insurance carriers can rescind policies, but the companies are still allowed to cancel coverage if they find out people lied when filling out the forms, Gerhart said. Such an action is unlikely, but not impossible, he said. And if it happened, a consumer could face devastating medical bills.

Gerhart agrees with other critics that the smoking question is poorly worded, giving consumers too much leeway to fudge. He recommends that instead of lying, smokers take advantage of the rule that lets them qualify for the non-smokers' insurance premiums if they agree to participate in smoking-cessation services. "That would be a much better thing to do," he said, "and a much healthier thing to do."

Cost of tobacco use on insurance

Here are examples of how much more applicants would have to pay for health insurance if they admitted to being regular users of tobacco:

A 50-year-old Des Moines man who answered no on the tobacco-use question would be charged monthly premiums of $248 to $502 for CoOportunity Health policies, depending on which plan he picked. If he answered yes on the tobacco-use question, his premiums would be from $371 to $752.

If the man wanted to buy a policy from Wellmark Blue Cross and Blue Shield, his monthly premiums would range from $265 to $504 if he answered no on the tobacco-use question and from $304 to $579 if he answered yes.

If the man chose Coventry Health Care as his carrier and answered no on the tobacco-use question, his premiums would range from $208 to $360. If he answered yes on the question, his premiums would range from $250 to $432.