Randy Tucker / Cox Newspapers

DAYTON, Ohio — Smokers hoping to breathe a little easier under health care reform, which prohibits insurers from discriminating based on health conditions, might get choked up when they discover the tobacco penalties included in the Patient Protection and Affordable Care Act.

The federal law, which prevents health insurers from rejecting people with pre-existing conditions, still allows insurers to charge higher premiums based on risk factors such as age, location and family composition and tobacco use.

And tobacco use carries the heaviest penalties, allowing insurers to charge premium rates as much as 50 percent higher for smokers than non-smokers under the law.

“Why smoking?” asked Nathaniel Kesting, a 33-year-old Bellbrook, Ohio, student. “If you smoke, somebody’s always trying to tax you. I don’t know much about the health care law, but I thought it was supposed to be affordable. Isn’t that the name of it? Why do they want to tax smokers and nobody else? I think there’s a little bit of discrimination there.”

Beginning next year, someone such as Kesting, who is single, unemployed and uninsured, will be required to buy an individual health insurance policy independently or through a new state-based health care exchange expected to go online Jan. 1.

With income of about $15,600 a year in unemployment benefits, Kesting’s premium would be about $3,800, but government subsidies provided for low-income individuals in the health care law would cover almost 90 percent of that premium, based on calculations using the Kaiser Family Foundation’s online Health Reform Subsidy Calculator.

The maximum smoking penalty, however, would tack on another $1,916 to his premium — or more than 10 percent of his total income. At the high end of the spectrum, penalties could total more than $5,000 a year for smokers 60 or older, according to Kaiser, which has a website devoted to health care reform.

And since most smokers tend to be low-income residents, the surcharge could price many smokers out of the market and encourage them to pay the less-than-$100 penalty for not signing up for health insurance in the first year under the law, rather than paying thousands of dollars in premiums they cannot afford.

“The smoking surcharge can be a lot of money for some people, and that has prompted a debate in some states about whether they will allow the smoking surcharge for the very reason that they expect it to keep a lot of people from getting covered,” said Karen Pollitz, a health policy analyst at Kaiser.

Most people with employee-sponsored coverage won’t face such a dilemma because the individual market operates differently than the large group market in which employers pay most of the premium to provide coverage for their workers, said Mike Suttman, president of the Dayton-based employee benefits brokerage McGohan Brabender Inc.

In general, tobacco use isn’t used to determine rates in most large-group plans, although employers can impose their own penalties as a matter of policy, Suttman said.

Wal-Mart, for example, said last year it would charge tobacco users higher premiums but also offer free smoking-cessation programs, which would allow employees who smoke to avoid the penalty.

Still, employer surcharges for smoking are rarely enforced, Suttman said.

“There are provisions that allow the employer to charge a smoker surcharge,” he said. “But employers are kind of hesitant to do that in that it might affect a key employee that they don’t want to lose.”

The individual market raises no such considerations and, in fact, is likely to encourage insurance carriers to charge the maximum penalty allowed so their plans don’t become magnets for smokers, whose high health care costs can drive up rates for everyone.

Last year, tobacco use resulted in $96 billion in direct health care expenditures and $97 billion in lost productivity, according to the Centers for Disease Control and Prevention.

“If all the carriers but one charge the full 50 percent surcharge for smoking, and one only charges 20 percent, all the smokers will run to that carrier,” Suttman said. “It would be difficult not to charge the full premium, otherwise you would be a destination for smokers. Ultimately, it’s a business decision for the carrier.”

Faced with such high costs for coverage, some smokers seeking health insurance under the new health care law might simply deny their tobacco use. But Kaiser’s Pollitz warned: “It’s always scary to lie to an insurance company.”

While it would be difficult for insurers to determine whether new enrollees lied about their tobacco use on an application for coverage, once they’re admitted to a hospital or emergency department with a smoking-related illness, insurers could simply deny coverage and even prosecute them for fraud, Pollitz said.

“My guess would be that insurers in the health exchanges are going to be on the lookout for that kind of fraud, and those cases will probably be investigated,” she said.

Bruce Barcelo, who manages a smoking-cessation program in Ohio, said the financial burden of the tobacco penalty may ultimately have a silver lining. “I think the trend will be very much what we’ve seen whenever federal or state taxes go up on tobacco products; there’s always a decline in usage,” said Barcelo, who pointed out several national surveys that show the majority of tobacco users say they want to quit. “The question is what’s going to motivate them and help them quit,” he said. “For some, the financial incentive is an important factor.”

Still, despite widespread cessation campaigns and the high cost of tobacco products, statistics suggest that tobacco use hasn’t waned.