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States that prohibit tobacco surcharges completely are California, Massachusetts, New Jersey, New York, Rhode Island, Vermont and Washington, D.C. Connecticut also prohibits tobacco surcharges, but only for health plans sold in the states health insurance exchange (Access Health CT).
The explanation for this is simply that smokers are more likely to develop health concerns in the future, and therefore represent a greater risk for insurance companies. This surcharge is also known as tobacco rating, and states may opt out or charge below 50%.
A tobacco surcharge is a variation in insurance premiums based on an individuals tobacco use. The intention of tobacco surcharges is to incentivize tobacco use cessation, as well as to offset the higher healthcare costs attributed to smoking.
ing to the federal Department of Health and Human Services, insurance companies consider folks tobacco users if they use tobacco products including cigarettes, cigars, pipe tobacco, and chewing tobacco on average four or more times a week during the past six months.
(2) A surcharge is imposed upon the use or storage by consumers of tobacco products in this state and upon such consumers at the rate of 60 percent of the wholesale sales price. The surcharge imposed by this subsection does not apply if the surcharge imposed by subsection (1) on such tobacco products has been paid.