Provide incentives such as 20% off the health care premiums for non-smokers. Smoking is the #1 killer and contributes to thousands of health issues. Also, smokers are less productive since they are FORCED to take multiple 20-30 minute breaks per day to yield to their habit. The ONLY incentive for people to take care of themselves if cash money. The reduction in the health premium could be countered with a simple raising of the cig tax by 10%.
The health cost savings would be the government's gain in the long run and the additional productivity wouldn't hurt either.
Smoking is a disgusting habit and people have proven they couldn't care less about their health. People DO care about money and an additional $30-$50 per month for non-smokers might do the trick, especially if cigs got more expensive simultaneously.
UPDATE TO COMMENTS:
To the 1st comment: Sure, alcohol is a detriment, but it does not cause people to use 10% of every day as a break to destroy their health at the cost of people who choose not to destroy their health. And true, no way to tell if a person smokes; however, it's easily regulated by simple programs like when you sign a non-smoker agreement to get the discount on premiums, you are also saying you accept immediate termination if caught smoking... then simply offer $500 awards for anyone who reports a smoker (and make all federal property non-smoking). Easy, easy, easy... for people who are truly non-smokers.
To the 2nd comment:
I am a smoker (not).. :)
To the 3rd comment: Risk-based premiums are not discriminatory and they DO reduce costs. If I make a decision to smoke, why should everyone else pay my increased health care costs? That is discriminatory, if you'd like to go there. Also, the reduction in costs will be to people who can no longer afford to buy cigs because they're paying higher premiums. They will stop smoking and health will subsequently improve REDUCING health care costs. You are clearly a democrat and clearly not in full comprehension of the problem.