Moral hazard is a concept entirely based on rational economic actors.
If the potential future cost of dying of lung cancer doesn't deter people from smoking, then the potential future cost of bankruptcy from paying for lung cancer treatment isn't going to, either.
It's about the mispricing of future risk rather than moral hazard. If you brought the cost up-front, by giving them health insurance but charging additional risk premiums to smokers, then you would likely find more rational decision-making around smoking.
If the potential future cost of dying of lung cancer doesn't deter people from smoking, then the potential future cost of bankruptcy from paying for lung cancer treatment isn't going to, either.
It's about the mispricing of future risk rather than moral hazard. If you brought the cost up-front, by giving them health insurance but charging additional risk premiums to smokers, then you would likely find more rational decision-making around smoking.