Tobacco surcharges have long been a controversial topic in the healthcare industry. While many proponents argue that they are necessary in order to incentivize individuals to quit smoking and improve their overall health, others believe that they unfairly penalize those who are already struggling to afford healthcare. In recent years, tobacco surcharges have been implemented as part of the Affordable Care Act (ACA) Marketplace, with the goal of encouraging individuals to quit smoking and reducing the overall cost of healthcare for everyone. However, there is evidence to suggest that these surcharges may be having the opposite effect, as they may be contributing to a decrease in ACA Marketplace enrollment.

The ACA Marketplace is a platform that allows individuals to purchase health insurance plans, with the goal of making healthcare more affordable and accessible. As part of this platform, the ACA introduced tobacco surcharges, which are additional fees that individuals who use tobacco products must pay on top of their regular premiums. These surcharges vary depending on the specific health plan and the state in which the individual lives, but they can be as high as 50% of the base premium.

There are several arguments in favor of tobacco surcharges. For example, tobacco use is a major contributor to numerous health problems, including heart disease, cancer, and respiratory issues. By incentivizing individuals to quit smoking, the hope is that there will be a reduction in the number of tobacco-related health issues and a corresponding reduction in healthcare costs. Additionally, tobacco surcharges are often justified as a way to make healthcare more fair, as non-smoking individuals often end up paying higher premiums in order to subsidize the healthcare costs of those who use tobacco products.

However, there is also evidence to suggest that tobacco surcharges may be having negative consequences. One potential issue is that they may be disproportionately impacting low-income individuals, who are more likely to smoke and may already be struggling to afford healthcare. This could lead to a situation where these individuals are unable to afford the additional surcharge, causing them to go without health insurance.

There is also evidence to suggest that tobacco surcharges may be contributing to a decrease in ACA Marketplace enrollment. A study published in the American Journal of Managed Care found that individuals who were subject to tobacco surcharges were less likely to enroll in ACA Marketplace plans than those who were not. This finding is consistent with other research, which has suggested that tobacco surcharges may discourage individuals from enrolling in ACA plans.

One potential reason for this decrease in enrollment is that tobacco surcharges may simply be too expensive for some individuals. With surcharges as high as 50% of the base premium, the cost of health insurance can quickly become unaffordable for those who use tobacco products. This may lead individuals to forego coverage altogether, rather than pay the additional fee.

Another potential reason for the decrease in enrollment may be that tobacco surcharges are not effective at encouraging individuals to quit smoking. While the goal of the surcharges is to incentivize individuals to quit in order to avoid paying the additional fee, there is evidence to suggest that they may not be effective at achieving this goal. A study published in the American Journal of Public Health found that tobacco surcharges did not significantly reduce the number of individuals who used tobacco products, suggesting that they may not be an effective way to encourage individuals to quit.

In addition to the potential negative consequences for individuals, tobacco surcharges may also have negative consequences for the ACA Marketplace as a whole. As enrollment decreases, the pool of individuals who are paying into the ACA Marketplace may shrink, leading to higher premiums for those who do enroll. This could create a vicious cycle, where higher premiums discourage even more individuals from enrolling, leading to further decreases in enrollment and further increases in premiums.