Subcommittee passes bill to make repeal of tobacco surcharge permanent

Delegate Patrick Hope (committee transcript identifies him as the sponsor) presented HB 1639, which would repeal the sunset on the tobacco surcharge. Background: the surcharge originally allowed health plans to increase premiums for tobacco users by up to 50 percent. A Joint Commission on Health Care study and subsequent analysis by the State Corporation Commission found that the surcharge created adverse selection, discouraging younger, healthier people from enrolling and concentrating higher-cost tobacco users in the market.

Why it matters: Supporters including the American Cancer Society and the American Heart Association argued repeal improved marketplace access and enrollment, especially in higher-tobacco-use areas, while the SCC’s analysis found only minimal overall premium impact (less than 1% across enrollees after earlier repeal actions).

The sponsor offered a substitute amendment at the SCC’s request to continue one more year of SCC study. The committee adopted the substitute and subsequently passed the bill by recorded vote, 7-0.

Supporters said repealing the surcharge reduces barriers to enrollment and improves risk-pool balance; the SCC will continue to monitor enrollment and financial impacts. The bill now advances in the legislative process as reported by the subcommittee.