This is the third and final annual installment in the series of tobacco surcharge reports issued by the Bureau of Insurance (Bureau) on behalf of the State Corporation Commission (Commission) in accordance with Virginia’s 2023 legislation(*1) eliminating tobacco surcharges from health insurance premiums. The legislation requires the Commission to submit annual reports through January 1, 2026, addressing the premium and enrollment impacts. The premium impact analysis was completed in the initial report issued on January 1, 2024, which documented carrier-specific reductions in per member per month rates for tobacco users and the overall market premium adjustment. This report focuses on the second statutory requirement, examining enrollment patterns in the individual health insurance marketplace (i.e., Health Benefits Exchange(*2)) across Virginia’s localities based on their tobacco use rates, while providing context for understanding emerging patterns.

The data continues to demonstrate considerable variation and distinct enrollment patterns across different regions. While overall marketplace enrollment reached 386,626 in 2025, new enrollments rebounded to 71,247, an increase of 21.7% compared to 2024. Of the 108 localities that experienced increases in new enrollment from 2024 to 2025, 54 had above-average smoking rates.

However, the relationship between tobacco use rates and enrollment changes continues to be complex. Among localities with the highest smoking rates (25.1% to 27.0%), new enrollment changes from 2024 to 2025 ranged from modest increases to substantial growth. Localities with the lowest smoking rates (8.4% to 10.9%) similarly showed varied patterns, with many experiencing significant enrollment increases. The wide variations in enrollment changes across localities suggest that tobacco use is just one of many factors influencing insurance enrollment decisions. The sustained enrollment levels provide evidence that the marketplace continues to serve Virginia residents across diverse geographies and communities.
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(*1) House Bill 1375 and Senate Bill 1011 (Chapters 682 and 683, 2023 Virginia Acts of Assembly) [hereinafter HB 1375 and SB 1011].
(*2) Also known as Virginia’s Insurance Marketplace.