Smoker's Premium: The Effect of Charging Higher Health Insurance Premiums to Tobacco Users on Cessation

Objectives: Determine if charging tobacco users more for their health insurance premiums increases tobacco cessation above predicted levels. The Georgia State Health Benefit Plan (SHBP) began charging a tobacco surcharge on the monthly health insurance premiums of its tobacco using employees in July 2005. Methods: A comparison of proportions test examined the differences in tobacco cessation rates between a cohort of SHBP enrollees who were charged a tobacco surcharge (N=26,656), and the predicted population cessation rate. Results: Over the 70 months observation period 49.2% of the enrollees in the SHBP cohort quit using tobacco, a figure that was significantly different than the 13.9% that would have quit at the predicted cessation rate. Sensitivity analysis confirmed this finding when SHBP enrollees quit in greater numbers when compared to a range of population cessation rates. Conclusions: Charging tobacco users a higher health insurance premium appears to increase tobacco cessation rates. This study measures self-reported cessation and most likely overestimates the impact of the tobacco surcharge on health insurance, but sensitivity analysis indicates that the central findings of this study hold true. This is the first empirical study on the effect of charging higher health insurance to premiums to tobacco users and provides evidence that this rapidly spreading practice may improve the public health by increasing tobacco cessation.