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Should Companies Charge Less Fit Employees More for Insurance?

Many US businesses are requiring employees to prove their health and fitness for lower premiums.

The cost of health insurance is through the roof, and everyone is feeling the crunch.

Some US companies, though, are trying some new things to help rein in those costs and get employees to shoulder more of the responsibility. Now, instead of simply filling out a form and checking off what they want or need, employees are required to submit to a blood test, health questionnaire and, at some businesses, agree to participate in healthy activities to get lower premiums.

In a story from the Associated Press, companies are doing everything from offering lower premiums to workers who participate in wellness programs to limiting the types of plans available to smokers or overweight and obese employees.

"Employers are overwhelmingly recognizing that if they are ever going to get their arms around health care costs, they have to start by getting their employee population healthier," Jim Winkler is quoted in the story. He is a representative from Aon Hewitt, a benefits consulting firm.

Businesses often hire a third party to administer and run testing and wellness programs to keep personal information away from the company Human Resources department. This way, private data stays private and the company only knows if an employee qualifies for a price break or not depending on their participation in programs.

In 2010, more than half of Wisconsin adults were considered overweight or obese, a whopping 63.6 percent, in fact. Further, 25 percent of Wisconsin high school students are considered overweight or obese.

Rising rates of overweight and obese citizens contributes to higher healthcare costs. A study from the Centers for Disease Control found that obese patients spent $1,429 more for their healthcare than their more healthy counterparts. That same study also found that in 2006, there was increased spending across the board for Medicare, Medicaid and private insurers alike for overweight and obese patients.

And while being overweight or obese isn't the only reason healthcare costs are on the rise, certainly we can connect some of the dots that by getting health under control also leads to getting healthcare costs under control as well. The healthier a person is, the less medical attention they require and that brings costs down for everyone.

James R Hoffa October 30, 2011 at 07:50 PM
If the correlation is sound, then incentive (merit) based premium pricing makes sense in that it rewards responsible behavior and shoulders more of the burden upon those who actually use more of the health services provided by such coverage. It’s similar in nature to a consumption tax – the more you use, the more you pay. It’s a completely logical and equitable proposal that I have no problems with. I say more power to them!
jt October 31, 2011 at 02:44 AM
James, i don't think it's a matter of usage, but rather a matter of if a person is considered fit. some people who are very fit may have some higher usage because of sports injuries. but those costs may not be as high as someone who is heavy and may have more serious health issues. and i agree that fit people should be able to catch a break on their premium. but, what about if your kids are fat, or your spouse gains weight? are you going to go home one day and tell your wife shape up or ship out? i think this might lead to some underlying risks. and insurance companies are always looking for ways to sidestep. i would like lower premiums, but i don't trust it just yet!
tommytardy October 31, 2011 at 10:02 AM
Companies will be barred from instituting caps on coverage when your costs for treatments goes up due to sickness, you can now get insurance with out caps on coverage at "Penny Health" search them online.
Heather Asiyanbi (Editor) October 31, 2011 at 01:54 PM
A friend's employer switched to an HSA high-deductible, high out-of-pocket plan to which the company contributes a little less than half the deductible money into the account. This year, they're still making those funds available but instead of just depositing the amount, the company is changing the schedule to quarterly and only if employees first undergo a biometric screening, health assessment and consult (over the phone) with a wellness professional. Further, to get the quarterly deposit, the employee (not sure about the rest of the family) must have 1 consultation with the wellness professional AND participate in a some type of program like Weight Watchers or activity like walking, biking or going to the gym on a regular basis. I used to work at a non-profit weight loss organization and I can't tell you how many people ended up controlling their various health issues like diabetes with diet and exercise once they got moving. It can be done and in the end, it's a whole lot less expensive.
Heather Rayne Geyer October 31, 2011 at 10:05 PM
Descrimination is wrong no matter which way you cut it. Medications, syndromes, hormones can all cause havoc on your weight thru no fault of your own. Thin people can be extremely unhealthy too. This should really bother people who hates big brother. How is this any different than the govt telling you that you cant smoke in a bar? People who are obese (which you should really find a BMI calculator online before you think you are just a little pudgy...obese doesnt mean what many people think it means) or who smoke will be paying more anyway. This shouldnt be about punishing someone for being irresponsible. Seriously - I dont get how anyone who follows this whole new conservative/tea party/libertarian view could EVER support this. So it is ok to MAKE people stop eating or smoking but making them pay a tax on cigs and fast food is wrong??
Heather Asiyanbi (Editor) October 31, 2011 at 10:45 PM
Don't you think some of it could be a public health issue? If a full 63% of Wisconsin adults are overweight or obese, and the resulting health issues cost all of us more in the end, doesn't it make sense to offer an incentive to get healthy? The bottom line can be a powerful motivator. I find it heavily intrusive and my hackles rise, truthfully, when I think about being told I have to do this or that to get insurance. I mean, I am paying for it, right? But then I also think about how I walk/jog/do the obnoxious hill at Lockwood, eat right most of the time and drink more water than anything else, which makes me feel better and, turns out, keeps me healthier. (what a concept!) So ... shouldn't I get the better rate for doing it right? I'm not talking about stuff that is out of your control, obviously.
Heather Rayne Geyer October 31, 2011 at 10:57 PM
I TOTALLY see what you are saying. I just worry that the powers that be won't be able to determine who is fat because of choice or not. Or where the lines will be drawn. I actually support doing things to make our population healthier. I think there should be higher taxes on smokes and fast food...maybe all junk food incl. soda. I think that something needs to be done to make healthy food more affordable than McDonalds. I think there should be other incentives to push people off their couches that don't include discriminating or punishing the others. Maybe offer health prizes each year or something like that. We need better gym classes. Maybe affordable Y memberships...healthy eating classes...there has to be another way. An example. I went on a medication right before I got pregnant. Because of that (partly) I gained over 70 lbs during my pregnancy. I lost 30 the first year or so and that was it. I went on an additional medicine and no more weight would come off. For 6 years I fought to lose that extra weight. I tried EVERY thing. IThe Drs kept telling me it was NOT the medication. I was miserable and felt like a failure. I finally went off the medicine I believe was causing this and BAM!! In 3 months I lost over 30 lbs. I was not doing anything different than I had already been trying. Clearly it was the medicine but even the Drs didnt seem to understand that. Some suit in an ins. co. sure wont.
James R Hoffa October 31, 2011 at 11:37 PM
@HRG - It's not the government that's doing this - it's employers that provide their employees with a health insurance benefit. Also, you're putting WAY too much emphasis on just weight here. The key appears to be being 'healthy,' which is measured individually (thus the need for actual examinations as opposed to just drawing conclusions from raw numbers), combined with actively engaging in what is considered to be a 'healthy lifestyle’ by a consensus of medical professionals. That's why I premised my opinion by stating "[i]f the correlation is sound...[,]" and believe me - that's a pretty big IF! But the theory behind the measure is sound in its logic and really does stand on the basis of common sense. On the one hand, those who are unhealthy and/or live unhealthy lifestyles will be subject to higher premium costs via implementation of such policy, but on the other hand, is it really fair that those who are healthy and practice a healthy lifestyle have to subsidize the unhealthy’s premium payments by constantly having to pay an equal/comparable premium rate?
James R Hoffa October 31, 2011 at 11:37 PM
If you have car insurance, I’m willing to bet that you enjoy getting a policy premium reduction/deduction for safe driving, right? Or are you OK with subsidizing those who drive with reckless abandon? Similar concept here. Those that drive unsafely and get into many accidents should have to pay more than those who drive carefully and get into few if any accidents. It just makes sense! The only ones who stand to be unfairly hurt by such a policy are those who are born with unhealthy medical conditions through no fault of their own or their parents. However, if such policy premium incentives encourage and actually help to produce a healthier population of people, then the cost of government insurance programs will go down, thus allowing adequate funding for the government to provide assistance to those who are truly unfortunate. But those who only become unhealthy solely because of personal/individual choices exercised are not truly unfortunate, and therefore should have to pay more because of the personal freedom of choice that they exercised. It’s really a win-win all around!
James R Hoffa October 31, 2011 at 11:45 PM
@HRG - So, apparently you didn't really need that medicine then if you were able to just drop it? Over medication of our society is becoming a big problem - that's only why I ask. Personally, I refuse to take most medicines unless I verify their legitimacy first, and even then only if it's absolutely necessary. Maybe that's why I haven't been to a doctor in the last 15 years - I just don't trust most of them to truly have solely my best interest at heart.
Elaine November 01, 2011 at 12:11 PM
I read the detailed article yesterday. Really makes me angry at the increased intrusion of my workplace into my personal life. Article talked about companies monitoring things like weight, smoking, cholesterol levels, bloodwork. Motivation is one thing, & I've availed myself of programs in the past. But no one has the right to tell me whether I must take meds to control my genetically high cholesterol levels. Next they will be saying I pay more because my family is predisposed to cancer or other health risks. The screenings I have to take concern me, because I believe that info is being kept to develop a long-range profile to do just this sort of billing. As for weight loss, in some cases they are requiring employees to join "approved" weight-loss organizations. So now they can tell me how I must budget my money without paying for it?? Sorry, the meager 10% off standard health club fees isn't going to help me afford it. I say - while they're monitoring my lifestyle choices, then let them also monitor the extreme stress my company puts me under by outrageous workload expectations because they've cut employees. Since high stress is a primary factor in many illnesses, it's only fair to include it in the whole employee picture, right?

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