Your Money And Your Life

Two new Louisiana laws aimed at smokers have made 2024 the perfect time to kick the habit.

About one-third of Americans made a New Year’s resolution or two this year, according to a recent poll conducted by YouGov. The most popular resolutions, it may come as no surprise, are to save more money and improve physical health.

One big way to do both is to quit smoking.

First there are the savings of the habit itself. In Louisiana, the average cost of a pack of cigarettes is $7 (below the national average of $8 per pack) according to the World Population Review. That would put the average cost paid per year for a pack a day smoker at $2,555 per year.

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Then there’s vaping, which has exploded in popularity. According to the Centers for Disease Control and Prevention (CDC), e-cigarettes and prefilled mint cartridges increased nationwide 122.2% in sales from Sept. 2014 to May 2020.

While typically cheaper than cigarette smoking, the cost can still be substantial. The average cost per week for JUUL pods is $20 ($1,008 per year). The average cost per week of e-liquid used on refillable products is $30 ($1,512 per year), according to 2022 data from the journal Tobacco Control.

Last July, vaping got more expensive in Louisiana thanks to a law that tripled the tax on vapor products and electronic cigarettes from five cents milliliter to 15 cents per milliliter. Louisiana is among only 30 states and the District of Columbia that have enacted taxes on e-cigarettes as of June 2022.

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The cost of the actual products, however, can be a miniscule portion of the real costs of the habit. 

“Smoking isn’t just bad for your health. It can also make your financial future go up in smoke, potentially losing you millions of dollars over a lifetime in the most expensive states,” said Wallethub Analyst Cassandra Happe, speaking about a Wallethub study looking at the real costs of smoking by state released Jan. 10. “While tobacco products are expensive, the bulk of the money lost by smokers comes from income and investment losses. Increased healthcare costs and home insurance premiums are among the other big financial downsides of smoking.”

Louisiana ranked among the lower end of all states when it comes to the financial cost of smoking, with an overall rank of 46 out of 50. The study looked at things like increased healthcare costs, out of pocket costs and financial opportunity cost per smoker — defined as the money an average person would lose by spending their money on smoking instead of investing it.

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The study found that smoking in Louisiana costs an average citizen more than $65,000 a year.

Robert Ziegler, an insurance agent with Liberty Mutual based out of Metairie, confirmed that smokers are hit hard when it comes to insurance.

“With life insurance, the premiums are astronomically different,” he said. “Every company is different, of course, but you can see rates close to double for someone who smokes — which includes vaping. Insurance companies recognize vaping as smoking. Even if you smoke one to two cigars a month, you are considered a smoker.”

While again, costs can vary by insurer, the Affordable Care Act permits health insurance companies to charge up to 50% more for premiums that are 1.5% higher than nonsmokers.

There is a bit of good news in all of this, however. Because healthcare costs in Louisiana are so high, the state has decided to offer those that want to quit some free assistance.

As of Jan. 1, all health coverage plans in Louisiana — including both Medicaid and private health insurers — must offer a minimum 6-month smoking cessation program benefit. Benefits include “behavioral counseling (e.g., individual and group counseling) and cessation medication (e.g., nicotine replacement therapy, bupropion, varenicline) but not e-cigarettes because the FDA has not approved e-cigarettes as a cessation aid.”

“Louisiana Medicaid spends nearly $40 billion annually on treating tobacco-related diseases and disability,” explained Michael Celestin, PhD, who is the director of the Louisiana Tobacco Control Initiative, a program of the Louisiana Cancer Research Center. “Reducing the current smoking rate, by even just 1%, in the Medicaid population in Louisiana could save close to $31.7 million a year in Medicaid costs.”

Pricier products, continuously rising insurance costs and widespread inflation, mixed with the offer of free, professional support in quitting? What better time could there be to make 2024 the year you become healthier — both in body and bank balance.

The Financial Cost of Smoking in Louisiana

(1=Highest, 25=Avg.):

Overall rank for Louisiana: 46th

Out-of-Pocket Cost per Smoker: $126,144 (Rank: 43rd)

Financial-Opportunity Cost per Smoker: $2,246,935 (Rank: 43rd)

Health-Care Cost per Smoker: $151,108 (Rank: 43rd)

Income Loss per Smoker: $462,853 (Rank: 48th)

Other Costs per Smoker: $16,170 (Rank: 41st)

Total Cost Over Lifetime per Smoker: $3,003,211

Total Cost per Year per Smoker: $62,567

*Data calculated based on someone smoking a pack of cigarettes a day from age 21 to 69.

 

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