You asked if insurance companies could consider a person’s obesity and smoking habit when developing his individual health insurance policy premium.

SUMMARY

Yes, insurance companies can consider a person’s obesity and smoking habit when developing his individual health insurance policy premium, unless the policy is a Medicare supplement plan A through G, in which case medical condition cannot be used as a factor.

INDIVIDUAL HEALTH INSURANCE RATES

Connecticut law prohibits individual health insurance policy rates that are excessive, inadequate, or unfairly discriminatory. Insurance companies must file rates with the insurance commissioner. The rates are effective 30 days from filing, unless the commissioner disapproves them for not meeting these standards (CGS § 38a-481(b)).

State law is silent with respect to what underwriting factors may be used to determine a person’s particular premium for individual health insurance policies, except for Medicare supplement plans. Insurance companies are prohibited from considering a person’s age, gender, previous claims history, or medical condition of any person covered by Medicare supplement plans, except for plans H, I, and J. For these three

plans, which offer the richest benefit designs of the 10 Medicare supplement plans generally available, insurance companies may consider previous claims history and the medical condition of the applicant when determining rates and granting coverage (CGS § 38a-481(c)).

MEDICAL COSTS FOR OBESITY AND SMOKING

A 2002 study asserts that adult obesity outranks both smoking and problem drinking in its detrimental effects on health and medical costs. A Rand Corporation economist examined the effects of obesity, smoking, problem drinking, and aging on chronic medical conditions, health-related quality of life, hospital and ambulatory care visits, and medication use. He found that obesity had significantly greater effects on the number of chronic conditions and quality of life indicators than current or past smoking or drinking. Its effects were similar to 20 to 30 years of aging.

The study concluded that obesity increases inpatient and ambulatory care costs by 36% and medication costs by 77% as compared with a person of normal weight. In contrast, 20 years' aging increases service costs by 20% and medication costs by105%, while smoking increases care costs by 21% and medication by 28% to 30%. In terms of absolute costs, an obese person spends about $ 400 more per year than average for inpatient and ambulatory care costs; a smoker spends about $ 230 more than average; and a problem drinker, $ 150 (Sturm, “The Effects of Obesity, Smoking, and Drinking on Medical Problems and Costs,” Health Affairs, March/April 2002).

Insurance companies may use this type of data to show that claims experience for obese individuals and smokers is worse than for people of normal weight and non-smokers. As a result, they may decide to charge higher premiums to the obese and smokers for posing an above average risk.

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