When you apply for health insurance, there is always a question about tobacco use. Insurance companies use your status as a tobacco user as one of the primary determining factors to set the cost of your health insurance premium. But what if you’re an e-cigarette user? Do you say yes and pay higher premiums, or do you say no and risk potentially committing fraud?
While the FDA does classify the e-cigarette as a tobacco product, it still tends to be a gray area for most insurance companies. Since e-cigarettes’ recent introduction into the marketplace, there’s been much debate over the health effects. Are e-cigarettes a nicotine alternative and cessation product to help smokers quit, or do they pose the same health risks as traditional cigarettes? As insurance companies learn more from e-cigarette research, health insurance premiums will be significantly impacted, for the better or worse.
Millions of Young Vapers
America’s youth could force the hand of insurance companies to create a clear designation on e-cigarette use. In 2018 the CDC found that 3.6 million middle school and high school students reported e-cigarette use. As the e-cigarette using youth come of age and join individual health insurance markets, it could certainly pressure insurers into a formal designation. A designation as tobacco use, would see significant increases in insurance premiums.
QuoteWizard analysts compiled data from the Centers for Disease Control and Prevention (CDC) to see where e-cigarette usage is most prevalent. From these figures, we ranked all 50 states to see where health insurance rates could be most affected by e-cigarettes. Below is a ranking of 1 to 50, with 1 being highest e-cigarette usage and 50 being lowest usage.
|State||Crude Prevalence (%)|
|T6. West Virginia||5.7|
|T14. New Mexico||4.9|
|T14. Rhode Island||4.9|
|T24. New Hampshire||4.6|
|T24. North Carolina||4.6|
|T29. New Jersey||4.4|
|T33. North Dakota||4.3|
|T37. South Carolina||4.1|
|T40. South Dakota||3.9|
|T42. New York||3.8|
Potential Health Insurance Increases from E-Cigarette Use
If health insurance companies begin to classify e-cigarettes as tobacco use under the ACA, the Tobacco Use Surcharge could kick in. The Tobacco Use Surcharge is a rule under the ACA that allows insurers to increase premiums up to a maximum of 50 percent for enrollees who signal they use tobacco. All but a handful of states stick to the maximum 50 percent surcharge for tobacco users. The states listed in the top portion of our rankings are states that abide by the 50 percent surcharge. If e-cigarettes gain the classification as a tobacco product in the eyes of states and insurers, those folks could see a 50 percent increase in health insurance premiums
QuoteWizard analyzed 2017 data from the CDC’s Behavioral Risk Factor Surveillance System of e-cigarette users in all 50 states. We took the crude prevalence of current e-cigarette users in each state and ranked all 50 states from the highest crude prevalence to the lowest crude prevalence. States with the highest crude prevalence are considered to have the highest rate of e-cigarette users and are therefore most likely to be affected by e-cigarettes in terms of their health insurance premiums.