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."

Comments

and if you have a slashdot account

[JeanBaptiste]

thats another 20

Re:and if you have a slashdot account

[jguthrie]

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.

Re:and if you have a slashdot account

[PFI_Optix]

it's just that the BMI is a pretty useless measure of someone's health.

Agreed. My BMI is 57, and I feel just fine thank you very much.

Now help a brotha out...I can't reach the remote and I can't get up off the couch. Could you change it to channel 114 and pass the Doritos?

Re:and if you have a slashdot account

[Sponge Bath]

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.

Re:and if you have a slashdot account

[Copid]

What I find interesting is that average Canadians pay almost 50% income tax.

Simple question: What on earth does that number have to do with the percentage of one's income one spends on health care? The people who bring up the "Oooh! Taxes!" argument always list the total tax burden for a country (taking advantage of the fact that countries with socialized health care also tend to have higher overall tax burdens) rather than the percentage that's actually spent on socialized health care. Anybody who quotes you numbers like that is either clueless, doesn't give a damn, or is trying to sell you something. The interesting question is, What percentage of Canada's GDP is spent on health care vs what percentage of our GDP is spent on health care? Other cost comparisons are simply not useful.

Re:and if you have a slashdot account

[Kadin2048]

That being fat also means you are more prone to certain health problems is a different issue altogether.

True, but the links between being overweight and many health problems are well established. I don't think any really reputable source is debating that being overweight -- particularly obese -- isn't unhealthy. Obese people tend to have an increased risk of heart disease, blood clots / strokes, diabetes, etc. The list is pretty long.

Every once in a while you'll hear someone talk about correlation vs causation and obesity -- i.e., whether being obese causes you to be unhealthy, or whether there's some sort of underlying cause which causes both obesity and the other health problems that it's correlated with, but to an insurance company that's irrelevant. They just want to find easily measurable risk factors and indicators; whether the relationship is causative doesn't matter a whit (to them).

Re:and if you have a slashdot account

[Marsmensch]

You are absolutely right. It's interesting to compare what the French and Americans spend on their healthcare systems. In the US we are spending 16% of our GNP and have 46 million people without any form of insurance (and of those who do have insurance, a lot of it is worthless when it really counts).

In France, however, they are spending 10% of GNP on a system which covers everyone and routinely outperforms what we have in the US.

More FUD to watch out for is the crap about lines and impossible waiting times. I've spent a total of two years in France, including two months in the hospital with a pretty nasty pneumonia. The staff was always courteous and competent. This is at the same time my compatriots were all bashing surrender monkeys and feeling clever.

Where will this madness end?

[Anonymous Coward]

Charging drivers with more accidents higher rates for auto insurance?

Re:Where will this madness end?

[McFortner]

The problem is that this is GROUP health insurance, not individual health insurance. The insurance company is taking a chance based on the group average. Some will cost more and some less than average. That is how they play the game. So they should not be able to charge more to some people in the group. This is just a way to make more money off of the consumer.

Now if these were individual health plans, then the market should decide. Don't like what company X charges, go to one that charges less. But employees don't have this choice in a group plan, so I'm against it.

Michael

Form of Discrimination?

[deadmantyping]

That sounds like it could be considered a form of discrimination. I doubt that obese people would take this move lightly.

Slope Slippery When Wet

[Hardhead_7]

Encouraging Americans to be healthy is great. I don't really have a problem with charging those who smoke more, for instance. But high blood pressure? Come on, that's hereditary. Once you start discriminating against people for their genetic makeup, you're on a slope that is not just slippery, but frictionless.

Bad idea

[mblakeley]

This is a horrible idea. The entire point of insurance is that everyone pays a more-or-less baseline amount and some people don't realize any of that value and some people realize more than they put in. Of course, now that Americans expect to realize 100% of any tax or insurance payments, and if even one penny goes to someone else, well, that's socialism! Insurance is inherently socialist. That's why it's called INSURANCE. If you're expected to pay an equal amount to what you receive, you don't really have insurance, you're paying as you go.

How not to do this

[onkelonkel]

I would have expected this to be spun 180 degrees. i.e. Jack the rates up for all and then announce you get a $10 discount for meeting the BMI standard rather than a $10 penalty for failing to meet it. Same outcome, but less likely to piss people off.

Re:How not to do this

[MojoRilla]

The truth often does piss people off. From the article:

After benchmarking other companies, Clarian, which had already been encouraging employees to join smoking cessation programs and take health risk tests, decided charging employees was more "transparent." Other companies "were providing what they called incentives through credits or discounts toward health premiums," says Wantz. "What we found was what those employers were doing, many times, was raising their premiums and discounting them back."

I can't fault a company for being transparent. Even if it is news I don't like.

Re:Good

[Surt]

Maybe we should do away with insurance (averaging) altogether, and just have everyone pay for whatever happens to them.
After all, if you don't have cancer, why should you pay extra for the people who do?

Re:What's the problem?

[Joebert]

Agreed, & I have a solution.

We should gather every employee in a room & stand them on a table one-by-one, if the majority of the room thinks that person is a fat bastard, that person gets charged more.

Re:Slow news day?

[AuMatar]

No, it isn't. The point of insurance is that a certain percentage of a population will get hit. By spreading the financial risk over a large pool of people, each person pays an amount they can afford in case its them.

This is why private insurance is a bad thing- their job isn't to maximize protection, but to maximize profit. Ideally, they would want to insure only the people who don't get sick and none of those that do, to make 100% of that money in profit. In other words, they want to make it a giant scam, taking your money but providing no services. This doesn't stop the others from getting sick, it just forces them to pay through the nose for non-insured rates, or get no health services at all. And since we live in a humane society where we don't let them die on the street, society as a whole pays a higher rate as we pay for them to take up emergency services when things go completely wrong, rather than cheaper, more effective, and less risky preventitve care they'd recieve with insurance.

So no, this is *not* a good thing. This is a perversion that will inflate the pockets of wealthy insurance companies while bankrupting the lower and middle classes. This is why we need to get rid of insurance companies and get government healcare *now*.

then what's the point of insurance?

[amigabill]

I always thought of medical insurance as a socialist concept. Everyone pays into a bucket, and the sick people take out of it when needed. So long as there are more healthy people than sick people, it should work. Even in capitalist implementations of medical insurance schemes.

So if sick people need to pay more than healthy people, what's the point of having insurance? Healthy people then shouldn't need to pay anything, as they aren't costing anyoen anything. And sick people should pay everything, as only they need it. Which completely voids any reason to send any money to the insurance guy. OK, that's going further than this article summary sounded, but if this idea gains any momentum that may be where we end up at.

How about this, as a related idea... Old people should pay more into social security because they use it more. young people should get discounts because they're a long way away from taking it. I bet todays elderly would get all riled up if we tried to make that change, eh?

If this is meant to be motivation to fix things, some things cannot be fixed. I've got high cholesterol. Very high. And very bad ratio of HDL to LDL. I'm relatively young, 31. I've gotten into running, have done a couple relay marathons (split the maraton distance between four runners) and am currently training for a 1/2 marathon. While still bad, my cholesterol measurements were better BEFORE I started running. Now after doing it for a few years, my cholesterol is 20 total points higher and it's time for the pills to fight it. Weird but true. Not sure what my genetics have in mind, but the doctor told me of other patients more athletic than I am trying to become are not able to lower their cholesterol without pills either. No amount of financial motivation can change that, and no amount of financial punishment for testing poorly will help either.

This is crap

[palladiate]

They can go screw.

I have a BMI over 30. I used to play baseball. Heartrate? 63. BP? 122/63. Glucose, white cell count, red cell count? Normal. My doctors say I'm perfectly healthy, except for the rare form of cancer.

I truly fear the future where we treat insurance as a personal thing. We invented insurance as a way to spread risk. If we charge you directly for your risk, we are creating no economic benefit. It just means that in the future, I'll have to bear the entire cost of my cancer treatments.

And the healthy? You'll get the privilege to pay a private company to absorb zero risk.

It's NOT insurance

[Waffle Iron]

If employer-sponsored group plans were insurance, then people and their family members who have certain chronic illnesses would have no more hope of getting in the group plans than they would buying an individual plan. Since the plan providers don't bother to apply the most basic actuarial principles to the participants of the plan, it's not insurance at all.

Instead, employer sponsored group health plans are a form of socialized medicine, but implemented under a private feudal system. This system helps keep employees dependent on and loyal to their healthcare lords, the employers.

Since it's not insurance, there's really not much point in trying to charge differential rates within the group plans. If they go too far with it, they'll end up with the same premiums and individual filtering for preexisting conditions associated with individual health insurance. If that happens, the employers would no longer be able to use health plans as a tool to keep their employees pacified, employers no longer find it in their interest to offer group health plans, and the political pressure would quickly build to switch this country over to government-backed health plans like every other developed country on this planet.

Re:Is this bad?

[Maxo-Texas]

I agree.

And I think anyone that gets a sun burn or sun tan should pay extra as well.
And anyone that doesn't eat range fed chicken.
And anyone that eats meat.

And anyone that doesn't do exactly what I want.

Because my real purpose is to control them.

Re:you're making a joke but

[Daengbo]

I'm not a body builder, but I work out regularly. I started last year. My BMI has remained the same (over 30), because neither my height nor weight have changed, but my body fat has dropped from 33% to 16%. I am still classified as obese by the BMI, but am now extremely healthy and well below the average (22%) for my age. BMI tells nothing. Body fat percentage is a better measurement, but you can't get that number from the information on the insurance application form.

Great idea!

[HangingChad]

We should gather every employee in a room & stand them on a table one-by-one...

Yeah! We could hire people the same way. Let different departments bid on them. Make them take their shirts off and show their teeth so you know they're nice and healthy. And, just for their safety and protection, we might want to chain them together, so they don't get scared and fall off the table. And maybe a small but tasteful whip, strictly to make sure things move along and people don't waste all day bidding on new employees. And make them sing worker songs, because people really like that. Swiiiing low, sweet cub-i-cle wor-ker...headed for the break room at niiiiiine. That's my favorite.

Dang, it seems so obvious. Why hasn't anyone thought of that before?

Re:you're making a joke but

[JazzLad]

But what you don't see is your lack of buoyancy increases your risk of drowning - why should a healthy tub-o like me have to pay for that? ;)