Obamacare: Smokers to get a break? Glitch may limit penalties.
Obamacare glitch benefits smokers: A computer system problem will limit the penalties that Obamacare allows insurance companies to charge smokers. The fix will take over a year.
They huddle outside office buildings and they can't satisfy their nicotine cravings by lighting up on planes and trains, but now smokers could be getting a break from an unlikely source.Skip to next paragraph
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A glitch involving President Barack Obama's health care law means smokers may get at least some relief next year from tobacco-use penalties that could have made their premiums unaffordable.
In yet another health care overhaul delay, the administration has quietly notified insurers that a computer system problem will limit penalties that the law says the companies may charge smokers. A fix will take at least a year.
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Older smokers are more likely to benefit from the glitch, experts say. But depending on how insurers respond to it, it's also possible that younger smokers could wind up facing higher penalties than they otherwise would have.
Some see an emerging pattern of last-minute switches and delays as the administration scrambles to prepare the Oct. 1 launch of new health insurance markets for people who don't have job-based insurance. Last week, the White House unexpectedly announced a one-year postponement of a major provision in the law that requires larger employers to offer coverage or face fines.
The smokers' glitch is "a temporary circumstance that in no way impacts our ability to open the marketplaces on Oct. 1," Health and Human Services spokeswoman Joanne Peters said in a statement.
A June 28 HHS document couched the problem in technical language:
"Because of a system limitation ... the system currently cannot process a premium for a 65-year-old smokerthat is ... more than three times the premium of a 21-year-old smoker," the industry guidance said.
If an insurer tries to charge more, "the submission of the (insurer) will be rejected by the system," it added.
Starting in 2014, the law requires insurance companies to accept all applicants regardless of pre-existing medical problems. But it also allows them to charge smokers up to 50 percent higher premiums — a way for insurers to ward off bad risks.
For an older smoker, the cost of the full penalty could be prohibitive.
Premiums for a standard "silver" insurance plan would be about $9,000 a year for a 64-year-old non-smoker, according to the online Kaiser Health Reform Subsidy Calculator. That's before any tax credits, available on a sliding scale based on income.