Originally posted by Dr of BBQ
The problem is that we also pay an overall higher life insurance because you smoke. We also pay higher health care because there are smokers.
Sorry to disagree but that's not true. All of the cost studies prove smokers pay dollar for dollar so much more in taxes and increased insurance premiums that it offsets what they drain from life insurance and healthcare. Jack@DrofBBQ.com
Economists widely accept that nonsmokers do not subsidize smokers, if calculated over both groups’ lifetimes
. While smokers only partly pay to have their smoking-related diseases treated,
they more than compensate in tobacco taxes and by collecting much less in old-age pensions, health care and other public benefits because they die younger.
however, the CBO (congressional budget office) came to its' own conclusions which take into effect a more comprehensive approach than that of Jan Barendregt's study which was published in the New England Journal (and is one of the most used studies by smokers as "proof" that smoking does not cost society).
"Life-cycle estimates provide somewhat contradictory evidence on the cost of smoking. Two major studies found that smokers had significantly higher medical costs over their lifetimes than did nonsmokers. A few other studies seem to draw the opposite conclusion, but their results may not be reliable.
"According to a study by Manning and others, the medical costs of a young smoker over his lifetime that are not directly paid for by himself or his family are about 18 percent greater than those of a nonsmoker with the same characteristics.
A 1992 study by Hodgson is similar to the Manning group's study, except that Hodgson focuses on total medical costs rather than only those medical costs that are paid for by persons or programs outside the smoker's family. As a result, Hodgson's estimates of the excess medical costs of smokers are higher than Manning's estimates. Hodgson found that lifetime medical costs were 32 percent higher for male smokers and 24 percent higher for female smokers.
"However, Hodgson's study, unlike Manning's, did not account for the different characteristics of smokers and nonsmokers. Manning estimated that about 13 percent of the differences in the medical costs of smokers and nonsmokers were the result of characteristics other than smoking habits. Lowering Hodgson's estimates by 13 percent leads to lifetime medical costs that are 28 percent higher for male smokers and 21 percent higher for female smokers.
"Hodgson also provided information on sources of funds for the excess health care costs of smokers. According to his study, private health insurance pays for most of the excess costs of smokers, with Medicare and Medicaid paying for 7 percent and 11 percent, respectively, of the excess costs of male smokers. For female smokers, 15 percent of their excess costs are paid for by Medicaid.
The estimated Medicare costs of female smokers were actually 3 percent lower than those of nonsmokers.
"In contrast, two studies by Leu and Schaub provide evidence that smokers might have lower lifetime medical costs than nonsmokers. Data on health care costs from a sample of Swiss men showed that smokers in the sample had somewhat fewer physician visits and slightly more hospital days compared with nonsmokers. But those analyses may have limited applicability to the United States, where studies have shown that smokers have more physician visits and hospital days than nonsmokers.
"Another study by Barendregt and others using data from the Netherlands found that lifetime costs were 7 percent lower for male smokers and 4 percent lower for females. However, that result does not discount lifetime costs to the present as the Manning and Hodgson studies do.
Using a discount rate of 4.5 percent to 5.5 percent to measure the present values of medical costs reverses the conclusions of the Dutch analysis. Moreover, the study may understate the medical costs of smoking since it considered only five major categories of disease rather than a more comprehensive set of medical conditions.
While economists have looked at current numbers, they have not taken into effect the discount that would be saved overtime to health care costs. Quoting the New England Journal conclusion on the cost of smoking to society: If all smokers quit, health care costs would be lower at first, but after 15 years they would become higher than at present. In the long term, complete smoking cessation would produce a net increase in health care costs, but it could still be seen as economically favorable under reasonable assumptions of discount rate and evaluation period.
In other words, while the numbers imply a net increase in health care costs, other factors are not considered in the equation.