Namely, the issue is the fairness of the laws.
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I could not agree with you more, but my conclusino is 180 degrees opposite.
It is an undeniable fact of underwriting that the claims experience of smokers is considerably higher (as a group) than that of non-smokers.
Where is the fairness in non-smokers underwriting (paying for) the health care of folks who choose to engage in a behavior that, as a group, creates higher claims experience.
Simple question: do you have a similar opinion for 16 year old boys having higher insurance premiiums for auto insurance, which is based entirely on the fact that they use the insurance more than 40 year old people? Or does that make sense to you? See the connection?
The same collective cost issue applies to some other minorities (racial, sexual orientation, women of child bearing age, religions, people above 50, people with pre-existing conditions or disabilities, etc). Yet they would get sued and lose if they tried to save money by collectively firing or excluding any of those groups.
The law should be fair -- either allow collective punishments or exclusions (in any role) of minority groups by businesses or not, as long as the law is the same regarding any group a business may target for whatever reason.
Note also that the above exclusion doesn't provide option for an individual to pay out of his pocket for any extra insurance costs or deal with health insurance on his own. For example, since I smoke but haven't seen doctors from 1991 for anything, not even for checkups (their nagging about smoking started to annoy me and diminish my wellbeing), I would be better off to just get the cash the company pays for employee health insurance and keep most of it (maybe divert some on catastrophic insurance).