Health care reform may penalize sloth
WASHINGTON – Get in shape or pay a price.
That is a message more Americans could hear if the health care reform legislation passed by the Senate finance and health committees becomes law. By more than doubling the maximum penalties that companies can apply to employees who flunk medical evaluations, the final bill could put workers under intense financial pressure to lose weight, stop smoking or even lower their cholesterol.
The initiative, largely eclipsed in the health care debate, builds on a trend that is in play among some corporations and that more workers will see in the benefits packages they bring home during this month’s open enrollment. Some employers offer lower premiums to workers who complete personal health assessments; others offer limited benefit packages to smokers.
The current legislative effort would take the trend a step further. It is backed by major employer groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers. It is opposed by labor unions and organizations devoted to combating serious illnesses, such as the American Heart Association, the American Cancer Society and the American Diabetes Association.
President Barack Obama and members of Congress have said they are trying to create a system in which no one can be denied coverage or charged higher premiums based on their health status. The insurance lobby has said it shares that goal. But so-called wellness incentives could introduce a colossal loophole. In effect, they would permit insurers and employers to make coverage less affordable for people exhibiting risk factors for problems such as diabetes, heart disease and stroke.
“Everybody said that we’re going to be ending discrimination based on pre-existing conditions. But this is, in effect, discrimination again based on pre-existing conditions,” said Ann Kempski of the Service Employees International Union.
The legislation would make exceptions for people who have medical reasons for not meeting targets.
Supporters say economic incentives can prompt workers to make healthier choices, thereby reducing medical expenses. The aim is to “focus on wellness and prevention rather than just disease and treatment,” said John Castellani, president of the Business Roundtable.
BeniComp Group, an Indiana company that manages incentives for employers, says on its Web site that the programs can save employers money in a variety of ways. Medical screenings catch problems early. Employers shift costs to others. Some employees “choose other health care options.”
Douglas Short, BeniComp’s chief executive, said the incentives he uses focus on outcomes, not conditions.
“I can’t give you an incentive based on being a diabetic or not being a diabetic, but whether you’re managing your blood glucose level – I can give you an incentive based on that,” he said.
The incentives could attack a national epidemic of obesity. They also cut to a philosophical core of the health care debate. Should health insurance be like auto insurance, in which good drivers earn discounts and reckless ones pay a price, thereby encouraging better habits? Or should it be a safety net in which the young and healthy support the old and sick with the understanding that youth and good health are transitory?
Under current regulation, incentives based on health factors can be no larger than 20 percent of the premium paid by employer and employee combined. The legislation passed by the health and finance committees would increase the limit to 30 percent and give government officials the power to raise it to 50 percent.
A single employee whose annual premiums cost him and his employer the national average of $4,824 could have as much as $2,412 on the line. At least under the health panel’s bill, the stakes could be higher for people with family coverage. Families with premiums of $13,375 – the combined average for employer-sponsored coverage, according to a recent survey – could have $6,688 at risk.
Employers and other advocates of expanded incentives say taking steps to get healthier would be voluntary. Sen. John Ensign, R-Nev., the lead sponsor of the Finance Committee’s wellness provision, said his proposal “would guarantee that the incentive is strong enough for Americans to want to participate.”