E-cigarettes are causing insurance confusion
Now that the FDA plans to regulate the devices like their tobacco alternatives, insurers are facing complications.
The Affordable Care Act has allowed health insurance companies to charge premiums that are up to 50 percent higher to smokers and other tobacco users than they would to nonsmokers, but the introduction of e-cigarettes into the marketplace have started to make rates calculations a little bit less clear for those insurers.
These battery operated devices have some of the properties of their tobacco based counterparts, but not others.
Therefore, when it comes to determining how premiums will be charged for the users of e-cigarettes, some insurers are finding things rather confusing. The devices themselves consist of an inhaler, a cartomizer (which is essentially a nicotine cartridge), and a lithium battery. During each puff on the electronic cigarette, an LED light is illuminated. While they are tobacco-free, the U.S. Food and Drug Administration (FDA) intends to begin regulating them in the same way as tobacco products such as cigarettes and cigars.
Currently, e-cigarettes are confusing things for insurance companies, as the legal definition of “smoker” is hazy.
The reason is that the Affordable Care Act is quite specific that higher premiums can be charged to smokers and other tobacco users, but when it comes to the actual term “smoker”, the definition isn’t entirely clear when these electronic devices come into play.
One of the ways that insurers might handle electronic cigarettes is to categorize them in the same way as other tobacco products. This will cause “vapers” – the nickname assigned to people who use the devices as opposed to smoking tobacco – to have to pay the same types of increased premiums as smokers of traditional products. This will, no doubt, cause considerable controversy, as they are not necessarily the same experience with the same risk, as the electronic version does not contain some of the problematic substances such as tar and other chemicals.
Another issue will be whether or not e-cigarettes should be covered by health insurance policies as a tool to help to quit smoking. The reason that this could be problematic is that there remains a lack of evidence that these devices would produce the same type of results a patch products. There may also be insurers that simply choose to ignore electronic cigarettes, entirely.