Smoker's Hit on the Exchange

[Ann H]

Great explanation, Ray. And, if I understand correctly, these different smoker surcharges per age band are actually allowed, it's just that the exchange system can't handle them this year, so QHP's with them are not able to be certified for sale on the exchanges this year.
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EDIT:
I just received a Health Net newsletter that said they will not be charging extra for Tobacco users in their 2014 rating structure.

 

[AllenChicago]

Great explanation, Ray. I just received a Health Net newsletter that said they will not be charging extra for Tobacco users in their 2014 rating structure.

I started adding to this dormant thread today because annual CT Scans are likely to become yet another free "wellness" benefit for smokers in 2015. Now we have HEALTHNET deciding not to charge an extra premium for SMOKERS? Freakin Amazing! They must be overcharging everyone else. Reminds me of how AETNA is priced here in Illinois. No smoker surcharge, so rates for non-smokers are higher as a result. Great company to place smokers and obese people with though!
ac

 

[Yagents]

I believe Health net does not rate up for tobacco now in AZ. I may be wrong. Ann, you are appointed with them.

 

[RayNY]

Great explanation, Ray. And, if I understand correctly, these different smoker surcharges per age band are actually allowed, it's just that the exchange system can't handle them this year, so QHP's with them are not able to be certified for sale on the exchanges this year.

Yes, specifically, the system "glitch" says that the age banding can only have a 3:1 ratio, smoker compared to smoker, non-smoker compared to non smoker. The progressive tobacco surcharge is the most accurate way to compensate for risk, and is allowed under the law, but can cause the issue I described.

Somewhere, an actuary is waking up in a cold sweat thinking about how this messes with their risk profile.