Slashdot Mirror
Charging the Unhealthy More For Insurance
Joe The Dragon sends us a BusinessWeek story, run on Yahoo, about Clarian Health and the new thing they are trying with health insurance coverage for their employees. They are charging unhealthy people more. The article goes into some depth about whether this is a good idea and whether the practice might spread. "In late June, the Indianapolis-based hospital system announced that starting in 2009, it will fine employees $10 per paycheck if their body mass index (BMI, a ratio of height to weight that measures body fat) is over 30. If their cholesterol, blood pressure, and glucose levels are too high, they'll be charged $5 for each standard they don't meet. Ditto if they smoke: Starting next year, they'll be charged another $5 in each check."
Except for the fact that the BMI is an outdated and inaccurate POS.
Linux, you magnificent bastard, I read the fucking manual!
Actually, I don't think it's at odds with the summary, it's just that the BMI is a pretty useless measure of someone's health.
What about sexually promiscuous employees, or employees that like skydiving or downhill skiing?
Have you read an insurance application lately? Non-commercial pilot, skydiving, rock climbing and other "dangerous" activities are asked about.
As for the rest, I'm sure they'll get to them eventually.
Learning HOW to think is more important than learning WHAT to think.
You need to worry about triglycerides too. I'm predisposed to very high levels...as high as 1200+ in the past....down to 540 these days....started on meds again and working out to try to get them under 200.
The reason I state this? I can't GET freakin' insurance.....unless you are working for someone else in a group plan, you can't get anyone to insure you. I have no other problems, BP is good, etc. I can more than afford to pay for insurance, but, I cannot get anyone reputible to sell it to me.
I didn't realize it would be so tough to get it at any price.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
I can't GET freakin' insurance...
You should check if your state has a state risk pool.
I am also self employed, and since I got sick once years ago I also
was not insurable through individual policies. A state risk pool gives people
like me coverage when nobody else will.
It's a little screwy because it is still a private insurer (at
least in the state of Texas) that is contracted by the state.
The premiums are set at double the average, so the private insurer
makes loads of cash (and the tax payers don't take a hit), but at least I have insurance.
The deductible is high, but I do get the negotiated rates
which are usually 1/3 to 1/2 of what the uninsured are charged.
The previous poster wasn't arguing that NO health metrics should be used, rather they were arguing that BMI probably isn't the best one. Which is entirely true. BMI makes assumptions about the amount of muscle and bone in someone's body. Since the percentage of muscle can vary widely, that's obviously not the best assumption to make. There are better ways to measure only the amount of fat in someone's body that resolves that problem, though they require more specialized equipment.
The whole point of insurance is to spread the costs around. Not risks, costs. Let's take an example. Suppose there's a group of 1000 people, and in any given year one of them's going to get hit with a $100,000 bill. None of them can afford that large hit, but all of them can afford to pay $100 per year. So they start a pool, each paying in their $100 with the understanding that the pool will cover the entire bill for whichever of them gets unlucky that year. Sure, the other 999 have to pay even if they don't get hit that year, but they also avoid the even higher expense of preparing to handle that big bill and the worrying over what'll happen if they get unlucky before they've saved up enough to handle it.
Now, suppose the guy running the pool for everybody decides there's an awful lot of money floating around in the pool. He could, he thinks, work out which person'll be the unlucky one that year. If he can, then he can charge that person the full $100,000 that year. That'll cover the pay-out and leave the other $99,900 in the pool for him to play with. Yes, this is the extreme case, but it's what the insurance companies here want to do taken to it's logical conclusion.
But wait a minute. If I'm a member of the pool, the whole reason I'm paying my $100 every year is so I won't get hit with the high bill if my number happens to come up that year. If I'm going to get hit with that huge bill anyway, why am I paying in? I'm not getting any protection from it, I'd be better off with that extra $100 every year to spend myself. The more it moves towards that extreme case, the less reason I have to pay into the pool. And even at the near end, the more people decide to pull out of the pool the more the guy running it has to charge those who're left, which makes it less attractive for them to remain in the pool, which means more people will pull out. And when there's nobody left, who will the guy running the pool get his money from? Oops.
Ok, well they make it sound like 48% is the effective tax rate not the marginal rate. First off you would have to be making $78,000 a year in 2007 to fall into the 28% marginal tax bracket but still do not see an effective tax rate that high. If you made $80,000, your effective tax rate is 20% even though your marginal tax rate is 28%. Don't forget that that is taxable income and doesn't include even standard deductions. If you take the standard that is $5,350 + $3,400 for yourself as a dependent. Now your taxable income is $71,250, bringing your tax burden down to $14,200 or 17.75%.
I live in Illinois and my states tax rate is 3% flat and most states are between 2 to 5%. There are only a few that are upwards of 8 or 9%. So using the example of a $8,000 a year income, you are being taxed 18% federally, 15% via SS, 5% state and 3% for Medicare. Now that is 41%. A difference of 7%. 7% of $80,000 is $5,600. Assume a $40 a month or $480 per year for a standard health care plan that you are paying 10% and your employer covers the other 90%. That is $480 annually or giving you a rough savings of over $5,000 a year. As you make more money this number gets even better. Which is why "People making more than $150,000 a year are eight times more likely than average to leave the country,'' said the Business Council on National Issues in a memo to Prime Minister Jean Chrétien.
I'm not not licking toads.