Youngkin’s veto could affect health insurance prices for smokers and non-smokers

RICHMOND, Va. (WRIC) — A bill on the court block this week could affect health insurance prices for smokers and non-smokers across Virginia.

If the General Assembly overrides Governor Glenn Youngkin’s veto and the legislation becomes law, it would prohibit insurance companies from charging tobacco users up to 50% more than non-smokers beginning January 1, 2023.

At least six other states and Washington DC they have already banned the practice, as many argue that the additional fee, enabled by the Affordable Care Act, is not working as intended.

Governor Youngkin’s veto puts him at odds with a bipartisan group of lawmakers, a nonpartisan report and a coalition of advocacy groups. A version of the bill passed with unanimous support in the Senate and a 72-27 vote in the House of Delegates.

In his written explanationYoungkin said that tobacco use is among the leading causes of chronic health problems that result in higher health care costs.

“This legislation would force insurance companies to recover the costs associated with tobacco users by increasing premiums for non-tobacco users,” Youngkin said. “The ability to reduce premiums by quitting smoking is also a valuable incentive to encourage healthier habits.”

Youngkin defended that position in an interview on Friday.

“When we actually artificially deflate a premium that, by definition, requires more spending for people who smoke, we actually have a real risk of driving people out of the insurance market,” Youngkin said.

Youngkin’s veto drew pushback from the American Lung Association, the American Cancer Society Cancer Action Network, the Virginia Poverty Law Center and the Commonwealth Institute for Fiscal Analysis.

In a joint letter to Virginia Health and Human Resources Secretary John Littel, the groups said Youngkin’s reasoning is in line with the original goals of the tobacco surcharges, but that more recent evidence justifies eliminating them.

“Surprisingly, they have been found to do the opposite: increase premiums, reduce enrollment, and limit access to smoking cessation services. As such, it is time to abandon this failed intervention,” the letter continues.

Delegate Patrick Hope, who sponsored the bill, said Youngkin’s veto caught him by surprise.

“He didn’t give me a warning. There was no discussion, no conversation about it,” Hope said. “I hope they see that the Governor’s veto was a mistake.”

Hope said the surcharge prevents some smokers from accessing insurance altogether, as well as programs to help them quit. She said higher prices are largely deterring younger tobacco users from signing up for coverage, skewing the risk group toward those with higher health needs.

A 2021 report examining insurance affordability in Virginia found that bringing more healthy people to market “would likely lower premiums.”

Specifically, the Joint Commission on Health Care found that eliminating tobacco surcharges could lower premiums in the individual market by 3% to 4.5% and reduce the number of uninsured Virginians by 3,000 to 14,000, depending of other policy factors. The recommendation was unanimously adopted by JCHC members from both parties.

Youngkin's veto could affect health insurance prices for smokers and non-smokers new table

“If we anticipate this will reduce premiums by 4.5%, that represents a savings for Virginians of $15.44 per month or $157.78 for the year,” Hope estimated. “Every Virginian who is in the individual insurance group will benefit from this bill becoming law.”

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For the bill to become law, the General Assembly will need to override Governor Youngkin’s veto with a two-thirds vote during a session scheduled for Wednesday, April 27. Hope acknowledged that it may be an uphill battle to get Republicans to publicly disagree with Youngkin, even if they previously supported the bill.

Asked to respond to Democrats like Hope, who say the governor made no effort to reach out before vetoing major bills, Youngkin said, “We had a comprehensive process of trying to reach out to legislators and talk to them about amendments. and vetoes and I believe that working relationship is constructive”.