Answer to Question #96217 in Microeconomics for emily

Question

Obesity and smoking are both linked to numerous adverse health consequences, including heart disease, cancer, and strokes, among others. The Affordable Care Act permits health insurance companies to charge people higher premiums if they smoke or are obese. But the law forbids the companies from charging higher premiums or denying coverage to people who have suffered strokes or have heart disease or cancer.

Answer 1

             

   Smoking related illnesses are costly and has contributed to loss in productivity in healthcare expenditures and claims lots of lives. Smokers are charged higher rates for health insurance to provide an incentive to stop smoking. Charging smokers more will encourage them to quit and thus improve public health and reduce society`s smoking related costs. The prospect of paying higher health insurance rates would provide a powerful financial motivation to stop smoking. Obese individuals and smokers die younger than health individuals, hence they have the highest healthcare expenditures till ages of about 56 years. The law forbids insurance companies from charging high premiums or denying insurance cover to the obese and smokers to avoid them from foregoing health insurance.