This country loves its sin taxes.
Look no further than the ample levies on cigarettes and booze for confirmation of that.
So, it should follow that when it comes to health insurance, policy makers might look to what amounts to a fat tax, or a high blood pressure tax, right?
We think that’s the wrong way to approach the issue. There is a difference between incentivizing the good and punishing the bad.
Arizona, for instance, proposed fees on Medicaid patients who smoke and are obese. Though the ideas ultimately were either dropped or shot down by federal officials, they were the wrong approach to the right goal.
The idea was to reduce health care costs by decreasing the incidence of health risk factors, such as smoking and obesity.
It’s well-established that people who smoke cigarettes or are significantly overweight are at risk for a variety of chronic and costly illnesses, such as diabetes.
But the $50-a-year fee on overweight enrollees is hardly the kind of punishment that would be successful in changing entrenched behavior. It would just amount to a tax on the poor and unhealthy. Taken to extremes, the penalty approach could devolve into the impractical and discriminatory.
The better approach is to offer people incentives for improvement. The Obama health care overhaul law includes a provision allowing employers to use as much as 30 percent of an employee’s insurance premium for wellness incentives.
As The Denver Post’s Michael Booth reported last Sunday, a national survey of large employers by the National Business Group on Health found that 80 percent plan to offer financial rewards for health in 2012, up from 54 percent this year (the number who will penalize workers will double this year to 38 percent, the survey found).
The trick is devising effective rewards programs, a proposition that comes with its own complexities. Behavioral economics suggest people are more motivated by incentives quickly earned as opposed to programs with longer front-end commitments before rewards are gained.
Kaiser Permanente of Colorado recently announced its policyholders may be eligible for a cash bonus of up to $150 every three months if they lose weight and keep it off.
So, what about the policy holders who regularly walk past the office brownies and exercise to keep a reasonable weight? Shouldn’t they be rewarded? In theory, those folks will benefit financially if overweight policyholders change their lifestyles and health care costs go down for their entire insurance pool.
A perfect solution? No, but we prefer the carrot to the stick, especially where personal behavior is concerned. It feels a lot less like Big Brother and a lot more like a helping hand.
