¶ … healthcare costs for smokers are significantly higher than their non-smoking counterparts, and this paper reviews the relevant literature to measure the degree, if any, to which smokers are currently paying their own health care costs. An analysis of the costs that are associated with the second-hand smoke generated by smokers to identify additional costs is followed by a summary of the research and important findings are presented in the conclusion. Smokers Should Pay for Their Own Health Care Costs Incurred from Smoking-Related Diseases

Despite a growing number of aggressive campaigns to completely eradicate the habit in recent years, many Americans continue to smoke tobacco and incur a number of smoking-related healthcare problems as a result. In fact, the costs that are associated with caring for smokers' healthcare needs far exceed those of their nonsmoking counterparts, but some analysts argue that smokers are already paying their own share of health care costs through hefty excise taxes and that the federal government actually makes money off smokers. These arguments, though, ignore the other costs created by smokers through second-hand smoke which can be harmful and even deadly. Calculating the costs of human life is a subjective enterprise, of course, but it is possible to calculate with some degree of accuracy that additional health care costs incurred from smoking-related diseases to determine if smokers are actually paying their own way. To this end, this paper provides a review of the relevant literature to determine the extent to which smokers are currently paying their own health care costs, followed by an analysis of the costs that are associated with the second-hand smoke generated by smokers to identify additional costs. Finally, a summary of the research and the outcome of the analysis are presented in the conclusion.

Current Funding Mechanisms for Smoker Health Care

According to Daynard and Barr (1999), since the mid-20th century, the big tobacco companies have engaged in a veritable conspiracy to hide the real truth about the dangers of smoking in ways that have helped recruit new generations of smokers. In fact, despite the growing body of evidence that smoking causes a wide array of healthcare problems and further exacerbates numerous others, a new group of smokers emerges and the costs that are associated with treating them continue to escalate (Sunstein, 2004). Indeed, each year, more than one million people in the United States develop smoking-related illnesses and more than 400,000 eventually die from these healthcare problems (Daynard & Barr, 1999).

Not surprisingly, then, many observers have called for American smokers to pay more of their share of the staggering healthcare costs they incur each year, but there are some factors involved that affect this argument in fundamental ways. For example, because there is so much money involved, there have been serious efforts in recent years to calculate just how much the federal government spends on the extra healthcare costs that are associated with smoking tobacco and it turns out that smokers are a gold mine for the government. The results of an early federal Food and Drug Administration (FDA) study showed that based on the significant excise taxes that are paid by smokers when they purchase tobacco products, smokers actually pay more than the costs of the individual health care (Daynard & Barr, 1999). Moreover, some authorities even argue that the manner in which Medicaid payments are subsidized by smokers even violates the Social Security Act by forcing them to pay what amounts to extra premiums into the federal health care system through heavy excise taxes on tobacco (Traylor, 2010). The 1998 Master Settlement...

Nevertheless, among the several provisions of the Master Settlement Agreement was the stipulation that the defendant tobacco companies had the responsibility to cover the costs associated with treating tobacco-related diseases that were assumed to be caused by the use of their products (Traylor, 2010).
The foregoing facts make arguments in support of requiring smokers to pay even more appear spurious on their face, but there is more involved in the analysis than first meets the eye and these issues are discussed further below with respect to the second-hand smoke generated by smokers.

Second-Hand Smoke and Health Care Costs

Even though many tobacco companies have known about the harmful effects of smoking for more than a half century and other research has confirmed these suspicions for more than 40 years, the potential adverse health effects of so-called "second-hand smoke" have only come to light relatively recently (Cox & Foster, 2011). In reality, though, just as many people begin to cough and wheeze almost as soon as they start smoking cigarettes, nonsmokers who are forced, for whatever reason, into close proximity to smokers for extended periods of time will likely experience these adverse health effects as well over time, making the connection with second-hand smoke fairly intuitive. Indeed, anyone who has ever sat too close to a campfire can readily testify to the harsh effects of inhaled smoke from whatever source. There are a number of second-hand smoke sources as well, making the experience pervasive for many nonsmokers who work in environments where large numbers of smokers congregate such as casinos (Cox & Foster, 2011).

Similar to its "first-hand" counterpart, second-hand smoke contains more than 50 carcinogenic substances and the research to date confirms that exposure to second-hand smoke can cause lung cancer, respiratory tract infections, nasal sinus cancer, and heart disease and there is no safe threshold for exposure (Cox & Foster, 2011). Therefore, it would appear reasonable to suggest that even though smokers are paying hefty excise taxes that help pay for their own tobacco-related health care needs, they are inflicting health care problems on others that will also require expensive treatment over time in ways that remain understudied. There is also the question of wrongful death. Although actuarial tables exist that help calculate the value of a lost life, these calculations fail to take into account the diminished productivity and quality of life issues that second-hand smoke causes, especially since the actual costs that are involved are unclear. Therefore, even though just a minority (approximately 28%) of Americans currently smoke, a majority of Americans continue to be exposed to the second-hand smoke they produce (Russell, 1999). Around 17% of Americans live with someone who smokes, and a majority of Americans (58%) have lived with someone who smokes at some point in their lives (Russell, 1999). Studies have shown that almost half (45%) of all Americans are concerned about the effects of second-hand smoke on their individual health, with younger people feeling less concerned than their older counterparts (Russell, 1999). Research, though, has also confirmed that younger people tend to underestimate the long-term effects of smoking (Sunstein, 2004).

Conversely, the counter-argument to the foregoing would be that smokers tend to contribute much more in Social Security contributions than they ever receive back because they do not live as long as their non-smoking counterparts (Daynard & Barr, 1999). For example, Limbaugh (2001) notes that report a June 1999 report from the Congressional Research Service found that because of their premature deaths, smokers save the federal government almost $30 billion in health care costs each years. According to Limbaugh, "The Congressional Research Service concluded that 'all in all, smoking has apparently brought financial gain to both the federal and state governments'" (quoted in Limbaugh, 2001, p. 11). This point is also made by Daynard and Barr (1999) who emphasize that although the argument that tobacco smoking costs the government money appears intuitive and is widely accepted as factual, the reality is far different. "Reduced to an issue of government 'cost,'" they advise, "cigarette smoking represents a net gain in government revenue. Combined with the massive tax revenues the government obtains from tobacco, it is clear the government has benefited…