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Smokers Continue to Cost All of Us More Than All Of Obamacare

By JOHN F. BANZHAF. Originally published at ValueWalk.

Government cracks down on tobacco but there is better way to cut health-care costs


The federal government has announced plans to reduce the amount of nicotine in cigarettes in a completely untested attempt to reduce smoking, but this approach will take many years to even be put into effect, and such an approach ignores many other proven techniques which will work more quickly, and could slash health-care costs now, says public interest law professor John Banzhaf.

Banzhaf has been called “The Man Behind the Ban on Cigarette Commercials,” “The Law Professor Who Masterminded Litigation Against the Tobacco Industry,” and “a Driving Force Behind the Lawsuits That Have Cost Tobacco Companies Billions of Dollars.”

Health-care costs
qimono / Pixabay

The approach announced Friday by the Food and Drug Administration [FDA] involves two different sequential rulemaking proceedings, a process which will take many years even to put a new rule into place, and one likely to be delayed even more by the inevitable litigation.

The FDA proposal also not only omitted for the nicotine-reduction requirement so-called e-cigarettes, a growing source of nicotine and nicotine addiction in both children and adults, but also extended until 2021 the time for manufactures of this deadly and addictive product to submit applications.

The announcement that the government plans to regulate nicotine in tobacco cigarettes, but not e-cigarettes, and to give e-cigarette manufactures years more time to submit their applications, was made by FDA Commissioner Scott Gottlieb, who, coincidentally, was previously on the board of e-cigarette maker Kure.

Ironically, there are many other actions the federal government could take which would have a much bigger and more immediate effect, says Banzhaf, noting the increased pressure to do something about rising health-care premiums now that efforts to pass health-care reform legislative have collapsed. Here’s why.

The American Lung Association estimates that smoking costs the American economy about $322 billion a year. This includes over $175 billion in direct medical care for adults, but does not include the huge increased indirect costs such has higher numbers of complications from surgery, delayed healing, etc.

Most of this alarming cost is now being borne by nonsmoking taxpayers in the form of higher taxes (to pay for Medicare, Medicaid, and other programs) as well as ever-escalating health-care costs (in the form of higher premiums, changing deductibles, etc.).

Since the Congressional Budget Office [CBO] estimates that Obamacare would cost about $1.34 trillion over the next decade – just under $140 billion/yr – reducing smoking could cover the entire cost of any new health plan – including many times over the costs attributable to pre-existing conditions – without using taxpayers’ money, or imposing higher insurance rates on the great majority of Americans who do not smoke.

Indeed, notes Banzhaf, since neither Obamacare nor any of the major Republican approaches to change it actually reduce health-care costs. but rather simply try to shift the huge existing burden, doing something like reducing smoking may be the only way to reduce health-care costs which are now imposed on policy holders, taxpayers, medical device makers, and others.

Here are several ways it could be done much more quickly and effectively than the totally untried long-term technique of reducing the nicotine concentrations in tobacco cigarettes.

One simple measure would be to raise the federal cigarette tax from its current level of $1.01/pack – a rate which has remained unchanged since 2009.

The Congressional Budget Office has recommended an increase of fifty cents per pack – an amount many studies have shown would significantly reduce the rate of smoking, and the huge medical costs imposed on the American economy, by the mere fifteen percent of adult population which still smokes – and an increase of one dollar per pack would have an even larger effect on reducing unnecessary health-care costs.

Interestingly, the CBO noted as one reason for raising the tax that “tobacco consumers may underestimate the addictive power of nicotine and the harm that smoking causes.”

Numerous studies have shown again and again that significant increases in cigarette tax rates are one of the most effective ways to help persuade smokers to quit.

Unlike most government anti-smoking programs which cost millions to hundreds of millions in taxpayer dollars, the cost of using this very effective technique is zero; or even less than zero, since net revenue increases even after making allowance for the reduction in the number of smokers.

Prohibiting smoking in workplaces and public places is another technique which has been proven to be very effective in reducing the rates of smoking and, like increasing taxes, is one of the few measures which cost taxpayers nothing.

Yet more than forty percent of the population live in a jurisdiction which does not yet have a comprehensive smoking law prohibiting smoking in workplaces, restaurants, and bars.

The federal government could remedy that problem, and immediately slash smoking rates, simply by adopting a federal clean indoor air act similar to that proven to be so effective in many states.

Alternatively, much the same result could be achieved without the need for any action by Congress by providing strong incentives for jurisdictions which do not now have comprehensive smoking restrictions to adopt them.

For example, the Department of Health and Human Services [HHS], which includes the FDA, could simply adopt a policy of giving priority in awarding health-related grants to jurisdictions which protect nonsmokers – and thereby also help persuade smokers to quit – by having clean indoor air restrictions in place.

The keen competition for these billions in grants would provide a very strong incentive for these remaining jurisdictions to join the remainder of the country, and save money, by prohibiting smoking.

A third technique would be to rescind guidance under Obamacare which requires companies to permit smokers to avoid the fifty percent smoker surcharge Banzhaf helped get included under Obamacare by simply spending a few hours each year in smoking withdrawal classes.

Congress intended to impose personal responsibility on smokers, the fifteen percent of the adult population which impose an unnecessary $322 billion dollar a year cost on all taxpayers, and not to let them skirt this requirement by attending a class or two, argues Banzhaf.

The current health-care costs nd medical expense crisis cannot be solved, or even significantly reduced, simply by shifting the new costs of insuring tens of millions of previously uninsured Americans to other entities such as middle class workers, hospitals, medical device makers, etc., notes Banzhaf.

Nor will tinkering around the edges – adopting electronic medical care records, improving record keeping, reducing unspecified “waste,” etc. – do much to solve the underlying problems, he says.

“It’s obviously far more effective to prevent a heart attack, lung cancer, or stroke from ever happening – e.g. by reducing smoking – than to treat it, no matter how effective the treatment might be.”

The best and most effective way to attack the health-care cost crisis is to recognize that so much of it is caused by smoking, and to start imposing personnel responsibility on the fifteen percent of American adults who continue smoking, expecting nonsmokers to absorb the cost, subsidize their insurance, etc., he says.

The post Smokers Continue to Cost All of Us More Than All Of Obamacare appeared first on ValueWalk.

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