Tobacco Surcharges Associated With Reduced ACA Marketplace Enrollment

Area of Science:

• Health Economics
• Public Health Policy
• Insurance Markets

Background:

• The Affordable Care Act (ACA) permits insurers to charge tobacco users up to 50% more for nongroup coverage.
• Understanding the impact of these tobacco surcharges on Marketplace enrollment is crucial for policy evaluation.

Purpose of the Study:

• To examine the relationship between tobacco surcharge rates and Marketplace enrollment dynamics.
• To assess how surcharges affect total enrollment and the proportion of tobacco users enrolled.

Main Methods:

• Analysis of 2014-2019 administrative data from HealthCare.gov, the federal ACA Marketplace.
• Statistical examination of surcharge rates, total enrollment figures, and enrollment shares of tobacco users.

Main Results:

• The average tobacco surcharge was approximately 14%.
• Higher surcharge rates were associated with lower total Marketplace enrollment and a reduced share of tobacco users.
• Tobacco surcharges had a greater impact on tobacco user enrollment in rural versus urban areas, potentially exacerbating health disparities.

Conclusions:

• Tobacco surcharges may decrease overall Marketplace enrollment and disproportionately affect tobacco users.
• Reducing tobacco surcharges could potentially increase total enrollment in the ACA Marketplace.
• Policy considerations regarding tobacco surcharges should account for their impact on enrollment composition and potential contribution to health disparities.