Virginia eliminates tobacco use surcharge under ACA plans

Virginia has banned payers offering coverage on the ACA marketplace from including a surcharge for tobacco use, effective Jan. 1.

The new law passed in 2023 also requires the state to submit an annual report detailing how premiums are affected by the surcharge elimination. For 2024, monthly premiums decreased between $25 and $123 for tobacco users, depending on their age. Overall premiums increased $3.80 per member per month to account for the elimination of the surcharge. The state said the surcharge elimination should also lower the number of uninsured state residents by 14,000.

In 2023, eight of 15 carriers on the marketplace applied tobacco surcharges, ranging from 5% to 20% in the individual market. None applied the surcharge in the small group market.

California, Massachusetts, New Jersey, New York, Rhode Island, Vermont and Washington, D.C. have also banned the tobacco surcharge.

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