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Court Upholds Individual Mandate, But a Much Better Alternative Exists Which the Public Strongly Supports

28.06.2012 - 14:59

Since smoking costs the American economy about $200 billion a year, even a modest reduction in cigarette consumption could save enough money to fund this massive health care reform, notes public interest law professor John Banzhaf, who helped develop a key method for requiring smokers to pay more of their fair share of the huge costs they now inflict upon others, and twice persuaded the federal government to approve the concept.

Requiring smokers to pay a surcharge on their health insurance premiums would not only fund much of health care, estimated to cost about $900 billion over 10 years - but also do something never even claimed for Obamacare - slash diseases and their resulting medical care costs.

As even the liberal Brookings Institution noted, "preventing diseases in the first place is obviously far more efficient than marginally reducing the costs of treating them once they've developed, and much better than simply trying to shift the costs to those in no position to reduce them, rationing health care, or stifling economic growth with taxes and regulations," says Banzhaf.

Ironically, Congress did incorporate that general principle - sometimes called individual or personal responsibility - into the Affordable Care Act, but only half way. The statute provides that, beginning in 2014, it is legally permissible to charge smokers up to 50% more for their health insurance than nonsmokers, without any need to meet the often expensive and complicated requirements for a "wellness program."

But any money collected in such smoker surcharges will go to the insurance companies, rather than helping to pay for the costs of health care reform. In adopting this provision, Congress rejected a detailed proposal developed by Prof. Banzhaf - and backed by a major national health organization - for the government to require health insurance companies to impose a premium surcharge on smokers, and for the government to use the money raised by the surcharge (actually a user fee) to help fund the huge costs of health care reform.

The proposal noted that since smokers cost the American public about $200 billion a year in excess and unnecessary health care costs and other expenses, requiring them to pay even a portion of that in the form of a smoker surcharge could pay for much of health care reform without any new taxes, individual mandates, or by imposing additional burdens on the great majority of taxpayers who are in no way responsible for bloated health care expenses. Also, anyone could escape paying the surcharge simply by quitting smoking.

Moreover, since it is well established that anything which increases the cost of smoking - e.g., higher cigarette taxes, increases in prices by manufacturers or sellers, etc. - substantially reduces consumption and strongly encourages quitting, even a moderate surcharge on smokers would significantly reduce the overall costs of health care by slashing the number of heart attacks, cancers, strokes, etc. which occur, rather than simply tinkering around the margins by reducing the costs of treating these expensive diseases once they occur, and/or shifting the cost burden to others.

The individual mandate may not be unconstitutional, but it also may not be the best or most popular method of funding health care reform. Congress is not required by today's decision to retain the mandate, and may want to consider a smoker surcharge as an alternative for the future, argues Banzhaf.

Professor of Public Interest Law
George Washington University Law School,
FAMRI Dr. William Cahan Distinguished Professor,
Fellow, World Technology Network,
Founder, Action on Smoking and Health (ASH)
2000 H Street, NW, Suite S402
Washington, DC 20052, USA
(202) 994-7229 // (703) 527-8418
http://banzhaf.net/ http://gwvolleyball.com