Exclusive Commentary: The FDA Is Rethinking Nicotine, Montana Should Too

"Healthier choices should carry a financial incentive for the consumer"

The Biden Administration moved fast in its final week to leave an impact on public health. In 24 hours, the Food & Drug Administration (FDA) announced a proposed rule that would slash the legal limit of nicotine in combustible cigarettes and then approved Zyn nicotine pouches for continued sale, indicating they are safer than cigarettes and the benefits of approval outweigh the risks posed to underage people.

Dumping cigarettes is consistently among people's top goals for a New Year’s resolution, right behind saving more money and losing weight. Of course, when it comes to smoking, all these things are connected, and more can be done to help consumers save money by developing better habits.

When you sign up for health and life insurance, there’s a reason you are asked about different parts of your lifestyle such as drinking or smoking. It impacts the insurer's risk assessment and your premium. Many employer insurance plans reward employees who hit step goals or lose weight, knowing that healthier staff will mean fewer insurance payouts in the long run.

Healthier choices should carry a financial incentive for the consumer.

But if you’re a long-term smoker who’s decided to ditch the cigarette in favor of an alternative nicotine product with a small percentage of the same harm, federal and most state regulations, don’t see it that way. Montana included.

Bear in mind that even on Medicare, tobacco-cessation devices such as nicotine inhalers are covered by insurance, because they are preferable from a health outcomes perspective. But if you use tobacco-free nicotine products such as pouches or vapes, that same system still sees and bills you as a smoker. This is wrong, and our insurance market is long overdue for a rethink on nicotine.

At last count, there are over 100,000 smokers in Montana. If half of the state’s smokers decided to switch to less harmful products for nicotine, we know it would bring innumerable savings to the state’s Medicaid program, as well as the insurance plans for state and local workers, primarily funded by taxpayers.

Not to mention the hundreds of thousands who have private health plans, and the 358,000 Montanans with life insurance policies.

As it stands, the industry standard for insurance enrollment and actuarial science still penalizes former smokers who switch to using non-tobacco forms of nicotine.

This misstep traces back to the Affordable Care Act (ACA), which allows a “tobacco surcharge” on health insurance premiums. Since non-tobacco nicotine products are classified as “tobacco products” by the FDA, most insurers make no distinction between someone who smokes a pack a day and someone who uses smokeless nicotine alternatives.

While some states have limited the applicability of a tobacco surcharge, Montana is not one of these states.

With that in mind, what could Montana do to encourage its insurers to accept the science that consumption of nicotine separated from tobacco is not the health risk we once thought?

For one, incoming Montana State Auditor James Brown could issue a rule or opinion that differentiates in law the difference between a nicotine user and a tobacco user. Health and life insurance plans ask their potential customers this question to gauge their risk and determine the cost of their premiums.

If a former smoker has quit combustible tobacco in favor of a smokeless nicotine product, their overall risk profile has significantly changed and the calculation should be upgraded as a result.

The FDA’s nod of approval for nicotine pouches as a less harmful alternative is strong evidence of a seachange on nicotine. The state of Montana should start modifying its health insurance market to reflect the growing consensus on nicotine and help consumers save some money.

- - -

Yaël Ossowski is deputy director at the Consumer Choice Center and co-author of Fixing What’s Broken: Practical Consumer-Friendly Insurance Reforms to Save Money.

The opinions discussed in this commentary are solely those of the author and do not represent the official stance of The Montana Chronicles. The Chronicles is committed to publishing different perspectives to encourage thoughtful discussion.