The logic behind that has always been smokers add Millions onto our health care costs. The truth is smokers die way before non-smokers do and cost the whole system LESS. Many never collect a dime of Social Security or Medicare. The real truth is the people sucking up the most Social security and Medicare $$$ are the ones that paid little into the system in the first place, live to be 98 YO and run to the doctor every time they have a hangnail or just want somebody to talk to, because they're lonely. 
You make an interesting point. This is according to the New England Journal of Medecine:
Background Although smoking cessation is desirable from a public health perspective, its consequences with respect to health care costs are still debated. Smokers have more disease than nonsmokers, but nonsmokers live longer and can incur more health costs at advanced ages. We analyzed health care costs for smokers and nonsmokers and estimated the economic consequences of smoking cessation.
Methods We used three life tables to examine the effect of smoking on health care costs — one for a mixed population of smokers and nonsmokers, one for a population of smokers, and one for a population of nonsmokers. We also used a dynamic method to estimate the effects of smoking cessation on health care costs over time.
Results Health care costs for smokers at a given age are as much as 40 percent higher than those for nonsmokers, but in a population in which no one smoked the costs would be 7 percent higher among men and 4 percent higher among women than the costs in the current mixed population of smokers and nonsmokers. If all smokers quit, health care costs would be lower at first, but after 15 years they would become higher than at present. In the long term, complete smoking cessation would produce a net increase in health care costs, but it could still be seen as economically favorable under reasonable assumptions of discount rate and evaluation period.
Conclusions If people stopped smoking, there would be a savings in health care costs, but only in the short term. Eventually, smoking cessation would lead to increased health care costs.
So it basically backs up your proposal of costs.
I smoked for 17 years. Started with Marlboro Gold 100's and worked my way up to non filtered Camels. There were times when I practically breathed the thing to the end. Never putting it down and just working through with a stick in my mouth. The day my daughter was born was when it changed. My wife and I were comfortable but at 5 bucks a day for two packs I made a decision. That money could be used to feed my child or burn my lungs. 3 months later, after 17 years of addiction, I left a half a pack on my desk and tossed them in the trash a month later. I have never looked back with any longing. Just regret. 17 years of wasted money and health. Killed my father with emphysema and heart disease. Try and figure that into statistics.
