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Reporter finds surprising stance on smokers' surcharge Date: 08/06/13

Stephanie O'Neill

Stephanie O’Neill, a health care reporter for Southern California Public Radio, tells the back story of her report on why California – a state that has taken the lead in combating tobacco – had second thoughts about whether to charge smokers higher insurance premiums as permitted under the Affordable Care Act. The issue put anti-smoking groups, such as American Cancer Society and American Lung Association, in odd alignment with tobacco companies on this matter.

It’s a topic you can explore with legislators, insurers and public health advocates in your state.

By Stephanie O’Neill

We all love sinking our reporting teeth into a good story, especially one with strong voices that clearly articulate each side of a controversy.

Earlier this year, I became interested in a provision in the Affordable Care Act that many people are unaware of. It allows states to permit insurance companies to charge tobacco users up to 50 percent more on their health insurance premiums than non-smokers. I knew I had a solid national story. And I figured I could flip it fairly quickly.

I was wrong.

Granted, it began smoothly enough. I learned about the rule while attending the February session of the NPR-Kaiser Health News reporting fellowship in Washington, D.C. One of the speakers, Karen Pollitz of the Kaiser Family Foundation, mentioned the surcharge during her talk. I scribbled a few notes, pitched the story to NPR and congratulated myself for my neurotic propensity to schlep my radio gear wherever I go. I grabbed an interview with Pollitz and start working the piece even before I got back home.

Pollitz told me that critics of the ACA rule oppose the surcharge mainly because it disproportionately affects lower-income folks. These people will get subsidies to help pay for insurance – but there’s no extra subsidy to help the tobacco user pay the surcharge. That could potentially push insurance premiums beyond the reach of many low-income tobacco users.

Next I looked at a report on the surcharge rule by the Institute for Health Policy Solutions, a Washington, D.C.-based organization that – to my delight – was located just a short cab ride away from my hotel. I met its president, Rick Curtis, the following day. And it got even better when I learned that his study actually focused on California, where I work as the health care reporter for Southern California Public Radio, KPCC.

Curtis told me the ACA rule gave states discretion. States can permit their insurance companies to charge the full 50 percent surcharge on smokers’ premiums. They can impose a smaller surcharge. Or they can disallow it all together. In California, he told me, there was a bill moving through the legislature by Assemblyman Richard Pan (D-Sacramento) that embraced that last option.

Upon my return from D.C., I left for a scheduled week-long reporting trip to Northern California that happened to include a day at the state capitol in Sacramento. I had a great interview with Pan, and then hit up his office for my final source – someone who supported the ACA surcharge and thus, opposed his legislation.

But here’s where things got more difficult: Pan’s office informed me there was no opposition.

What? Really? How could that be? What about the anti-smoking groups? The insurance companies? Nope, Pan’s aide told me.

Anti-smoking groups, such as American Cancer Society and American Lung Association, were in odd alignment with tobacco companies on this matter.

I called some health policy types who told me they either weren’t familiar enough with the rule to speak about it or, they, too, opposed it for the reasons cited in Curtis’ study. Calls to a couple insurance industry sources yielded nothing as well. In fact, the public affairs representative of one large insurer – apparently taking pity on my extreme frustration – told me the reason they weren’t taking a stand was that the rule was pretty much irrelevant to insurers’ bottom line. Insurers could recover any health expenses associated with smoking by including the overall costs as they set premiums for all policyholders.

It seemed it wasn’t politically savvy for any of the usual players to support higher health care premiums for smokers. That left me stumped. Then I remembered Micah Weinberg.

I’d met the senior policy analyst for the Bay Area Council at a conference a year earlier. He lived and breathed all things ACA and seemed prepared with an opinion on every aspect of it. A phone call to him confirmed it – he was familiar with the allowed surcharge and he was willing to speak out in favor of it.

I had found my man.

I set up an interview with Weinberg, who argued that higher insurance premiums for tobacco users — as long as they're not so high as to make one’s policy cost prohibitive — do in fact provide the type of financial penalties that some studies say cause people to quit smoking. And he went so far as to say that banning higher rates because smoking disproportionately affects the poor reflects paternalistic policymaking that does nothing to lessen the tobacco problem now costing the United States $190 billion a year in medical care and lost productivity.

With that interview in the bag, I told my NPR producer, that I could turn around the story ASAP.

Another setback: Technology was not on my side. When I attempted to pull Pan’s interview from the digital sound card, it wouldn’t play back. The card was giving me an error message that engineers at NPR and KPCC had never before seen. I spent more than a week trying to recover the sound, to no avail. So I had to re-interview Pan.

With all of the interviews really, truly finally done and safely transferred to my editing software, I voiced the story, sent it off to NPR and breathed a gigantic sigh of relief. Morning Edition was planning to air the piece on April 17th, in advance of the governor’s signature.

But on April 15, the Boston Marathon bombing happened.

The story made it to air – with little time to spare – on April 30th. On May 9, Gov. Brown signed the bill to prohibit surcharges on tobacco users’ insurance premiums in California. And even though a presidential press conference usurped its prime drive-time broadcast on many West Coast stations, the story nevertheless garnered plenty of attention. In the end, more than 200 comments pushed it to the top of NPR’s “Shots” blog, underscoring that these sometimes little-known rules in the complex federal health law are worth all the effort it takes in reporting them.

[An ironic P.S.: A computer glitch may delay or alter the smoker surcharges for the first year, as Ricardo Alonso Zaldivar reported in July.]

Stephanie O’Neill is the health care reporter for Southern California Public Radio. Her career includes more than two decades reporting for public radio, public television, newspapers and magazines. O'Neill has worked as a staff writer/reporter for the Los Angeles Times and as the first Los Angeles Bureau Chief for KQED's statewide show, "The California Report." Her reporting has won print and broadcast awards. She is also a recipient of a 2013 NPR-Kaiser Health News Fellowship; a 2013 Association of Health Care Journalists-California Health Journalism Fellowship and a member of the 2013-14 class of AHCJ’s Regional Health Journalism Fellowship program.