How insurance companies are gonna deal with ecigarette? Will insurance be cheaper for ecigarette users?
New studies and surveys are being conducted on e-cigarettes and their effects almost daily, however most reports are unable to deny the simple fact that e-cigs are far healthier for users than traditional cigarettes. The vapor inhaled when a user takes a puff of an e-cigarette is not only free of the smoke and tar that accompanies traditional smoking, but the vapor also does not carry the cancer causing carcinogens that you find in traditional tobacco smoke.
With such an obvious difference in the effect on a user’s health it seems a given that being a user of e-cigarettes would not hold the same penalties as a traditional smoker when it comes to insurance. This, however, does not seem to be the case. Being a user of e-cigarettes can potentially send your health, life and long-term care insurance sky-rocketing.
It’s not a surprise that insurance companies do not know how to handle e-cigarettes. They fall into many gray areas as new research is still being conducted and the product is only now beginning to have “long-term users.” Insurance companies are concerned about e-cigarettes being new, controversial and unregulated.
E-cigarettes are relatively new products. They only hit the market in the United States in 2007 and while they have experienced an incredible growth in that short time, they lack the ability to have a measurable track record with only 7 years on the shelves. Despite studies that are beginning to suggest its use as a cessation device, there is not enough to provide the support for a change in the underwriting approach. Health officials and organizations still have questions the long-term effects of vaping.
Another issue for insurance companies is the fact that they are a controversial device. The debate rages daily on the pros and cons of e-cigarettes. Proponents call e-cigarettes a healthier alternative to smoking and an effective smoking cessation tool. Opponents however feel that e-cigarettes could encourage nicotine as an entry-level drug for teens and adolescents.
Perhaps the most difficult challenge for insurance underwriters is that e-cigarettes are currently unregulated. The FDA is beginning to consider expanding their tobacco authority to regulate e-cigarettes, opening the door to taxing them. In addition the Centers for Medicare and Medicaid Services is considering whether health insurers can levy an up to 50 percent tobacco surcharge on e-cig users who buy Affordable Healthcare exchange plans.
With e-cigarettes being new, controversial and unregulated it seems that until more is researched and discovered, e-cigarettes will be unfairly compared with combustible tobacco products. Greg Conley, president of the American Vaping Association, a New Jersey-based nonprofit e-cigarette advocacy group. He says insurers unfairly lump “vapers” with smokers.
Conley, who quit smoking cigarettes four years ago by switching to e-cigarettes, went on to question the insurance companies methods. “A lot of the insurance applications say, ‘Do you use tobacco products?’ I think that 90-plus percent of former cigarette smokers who have quit with e-cigarettes and no longer use tobacco are going to mark ‘no.’ The problem is, they may end up testing positive for nicotine, which is what the insurance company uses to make a tobacco determination.”
Prudential Insurance Company is one of the only ones that allows non-smoker rates for e-cigarettes users. Tom Farrell, vice president of life underwriting for Prudential, says life underwriting is changing as we learn more about the benefits and risks of e-cigarettes.