Youngkin veto could impact health insurance prices for smokers and nonsmokers

RICHMOND, Va. (WRIC) — A bill on the chopping block this week could impact health insurance prices for smokers and nonsmokers across Virginia.

If the General Assembly overrides Governor Glenn Youngkin’s veto and the legislation is signed into law, it would ban insurance companies from charging tobacco users up to 50% more than nonsmokers beginning Jan. 1, 2023. 

At least six other states and Washington D.C. have already prohibited the practice as many argue the added fee, enabled by the Affordable Care Act, isn’t working as intended. 

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

In his written explanation, Youngkin said tobacco use is among the leading causes of chronic health problems that result in higher healthcare costs. 

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

Youngkin stood by that position in an interview on Friday.

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

Youngkin’s veto prompted push back 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’s Secretary of Health and Human Resources John Littel, the groups said Youngkin’s reasoning is in line with the original goals of tobacco surcharges but more recent evidence justifies eliminating them.

“Surprisingly, they have been found to do the opposite – increase premiums, depress enrollment, and limit access to tobacco-cessation services. As such, it is time to abandon this failed intervention,” the letter continued. 

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Delegate Patrick Hope, who sponsored the bill, said he was blindsided by Youngkin’s veto. 

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

Hope said the surcharge is blocking some smokers from accessing insurance altogether, as well as programs to help them quit. He said higher prices are largely deterring younger people who use tobacco from enrolling in coverage, which skews the risk pool towards those with higher health needs. 

A 2021 report examining insurance affordability in Virginia found bringing more healthy people into the market “would likely reduce premiums.”  

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

“If we anticipate that this will lower premiums by 4.5%, that’s a savings to Virginians of $15.44 per month or $157.78 over the year,” Hope estimated. “Every Virginian that is in the individual insurance pool will benefit from this bill becoming law.”

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 it may be an uphill battle to get Republicans to publicly disagree with Youngkin, even if they supported the bill previously.

Asked to respond to Democrats like Hope, who say the Governor made no effort to reach out before vetoing important bills, Youngkin said, “We had a comprehensive process to try to reach out to lawmakers and speak to them about amendments and vetoes and I believe that working relationship is constructive.”