Indeed, a typo, my apologies.

The point that it is a LOT less than 2 billion stands however

It’s assuming the 1% of smokers who are recipients are evenly distributed (statistically speaking) across the smoking population. A quite reasonable assumption.

Therefore, to generally reduce the population of recipients you’d have to reduce the population of smokers.

Unless you have data showing a specific population skew or sampling issue I’d say it is perfectly good math, albeit with an assumption.

Now, of course, you could simply deny service to 1% of smokers who would be recipients—or other extremely skewed sampling attacks—but that is somewhat unlikely and in most cases directly against the goals of the program.

It's not. Smoking among those over 65 has always been relatively rare. It used to be that the highest rates were among those under 30 but those younger adults today don't want tobacco and the current largest cohort of smokers is middle-aged. Less than 10% of over-65 Americans smoke tobacco according to various surveys.

Look around you, do you see only old sick people smoking? Also at this study (for Spain):

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6813084/

> Deaths due to lung cancer represented the 28.90% and the 10.83% of all cancer-related deaths in 2017 in males and females respectively, with an increasing tendency in this last group. In addition, the YPPLL count increased in the study period among females. Lung cancer was responsible annually for 60,846 YPPLL, and productivity losses summed €13.1 billion over the 10 year period.

This is true for my country as well. Govt taxes cigarettes around 1000%. I'm not kidding, that's a thousand percent tax. Our govt essentially runs on smokers and drinkers tax money.