[fruser1]

To address your two points more directly:

1) Financially, smokers are paying more through excise taxes and more expensive insurance, on an individual basis, and draw fewer tax dollars by having shorter lifespans, on a population basis.

2) I would say the fundamental problem is the confusion of population vs individual. As a population, you can certainly say smokers have higher surgical risk. However, at the doctors office, it is the individual who is under consideration, not the population at large. Simply being a smoker is not sufficient because, believe it or not, not all smokers are in the same physical condition. The individual can be tested.

Per contracts, if smokers are going to be excluded from certain coverage then there is no reason to charge them more for the coverage they do get. They should be charged less.

Also per contracts, a fundamental problem is requiring people to have insurance. In a free market, insurance companies could discriminate on coverage and policy holders and the individual can decide whether or not to buy it.

For non smokers contracting with those same insurance companies, they could decide whether or not it is worth it for them to have a policy from a company that handles smokers a certain way.

[markomalley]

To address your two points more directly:

Agreed with your comments. Two things to consider:

• When there is a third-party payer (commercial insurance or government) we are dealing with risk pools rather than risks for a specific individual.
• It would make sense that a third party would measure costs on an annual basis and that there will be different accounts used for different types of expenses.

  So while you make eminent sense when talking about governments gathering increased excise taxes being gathered while simultaneously paying out less for social security / pensions, I know of no cases where the increased taxes are being placed directly in a medicare/medicaid account, much less being funneled to a commercial insurance company to offset their expenses.

  Likewise, I know of no linkage between the OASDI fund and the Medicare fund where savings achieved as the result of a smoker's early death are funneled into the Medicare fund. (Or where other pensions that stop paying early as well)

As they say, different colors of money.