RSS 2.0 FeedEmployers Charging Unhealthy Employees For Being Unhealthy
by Brad WarbianyA bit of a furor erupted last year, when a company decided to fire current employees who smoke, and no longer hire smokers. The debate centered around the question whether an employee paying for your health care could force you to cease unhealthy habits.
This was a bit of a debate, but for the most part nobody outside of some libertarians really stuck up for the smokers, because smokers are “icky” and nobody likes them. Discrimination against hated minorities rarely result in condemnation. Now, though, a health-care company is raising the stakes, by telling their own employees they’ll be fined for poor health:
For employees at Clarian Health, feeling the burn of trying to lose weight will take on new meaning.
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.
This, of course, is inevitable. Government intervention has created huge incentives for employers to provide healthcare to workers, and made it nearly impossible for workers to self-insure. At the same time, anti-discrimination laws have made it impossible for employers to revoke coverage for high-risk individuals. Due to this (and a host of other interventions), healthcare costs are skyrocketing and employers are looking for any way to cut cost. But government has offered some clarification that relaxed the rules, and companies are taking advantage of it.
In addition, regulations that became effective July 1 could prompt cautious employers to step off the sidelines. The federal government recently issued final rules on how wellness programs could comply with the nondiscrimination conditions of the Health Insurance Portability & Accountability Act (HIPAA). While the new regulations have been proposed for years, the final rules provide employers with some sense of security and more clarification on how much they can reward or penalize employees based on specific health results. “When you get into things that involve discrimination, employers aren’t very comfortable with the words ‘proposed regulation,’” says Jerry Ripperger, director of consumer health for the Principal Financial Group, a financial-services and insurance firm that offers wellness programs for large employers.
So put the two together, and employers are going to do anything in their power to cut their healthcare premiums. Of course, anything in their power must take into effect employee morale, especially in an economy with low unemployment, where the desire to hire and retain talent requires that you keep those employees happy. And some employees may not be happy:
Clarian Health admits that its program is aggressive by design, and that employee reaction has been mixed, with much debate on its internal message boards. While some employees were supportive, there’s been “the other reaction that this is very personal,” says Wantz, with people asking, “‘How dare you? This is my personal space.’ There’s been a lot of questions and confusion.”
Herein lies the problem. Most people don’t like being told what they must do with their bodies. They don’t like it especially when it’s their employer, a relationship that already has the potential to be adversarial. But employees are incorrect when they refer to this as “personal” space. Insure yourself, and it’s personal space. Expect someone else to pay your health insurance premiums, and it no longer affects just you. I can guarantee that most employees will not like this development, but as I’ve always said with government, money and control come hand in hand. You’re taking their money, and you’re surprised they want to keep their costs down by keeping you in a low-risk group?
Sadly, while I support such efforts by companies to set their own insurance policies, I fear that this will lead to the wrong backlash. If more employers head down this road, it will only increase the call for single-payer socialized medicine. Americans don’t want to pay for their own health care, and certainly don’t want their boss telling them to drop a few pounds. To them, the only alternative will be government.
Government control won’t help, of course. Government will have the same (likely worse) rationing problems that private insurance has. The costs will go through the roof. And if you think your employer telling you what to do and not to do is bad, do you think it will be any better with the government in charge?
“Government will have the same (likely worse) rationing problems that private insurance has. The costs will go through the roof.”
That’s simply more BS porpaganda in favor of the current system. The Government already provides health care to millions both though the military, the VA, and special programs, and that care cost less than the comparable care on the civilian side, and what’s more it’s better care, and the pharmacy provisions are better with fewer errors than their civilian counterparts.
You’re talking a lot of bull that will be popular with your conservative readers but has little basis in fact.
Comment by tom bar — August 6, 2007 @ 3:37 amHa! The VA hospital system is good and the military get adequate health care?
Sure they cost less, and make fewer mistakes, but they also dispense less medicine. It’s all part of the government rationing system. They try to suppress the costs by denying service and essential care.
Many injured veterans have complained about receiving insufficient medical care after they received injuries. Again it’s the suppression of costs by denying services and essential care.
Albeit it’s the worst example, but do you really want Walter Reed as your hospital?
And that’s a fact.
Comment by TanGeng — August 6, 2007 @ 8:27 amTom,
Fewer errors in the pharmacy division? You want to toss a link in there showing where you got this information? And that care doesn’t “cost less” than the private system? It’s subsidized by taxpayer dollars so the costs are hidden, and even then costs still exceed revenue. Why do you think the Bush administration cut the budget for the V.A. in the middle of a war?
http://www.washingtonpost.com/ac2/wp-dyn/A24665-2004Mar2?language=printer
Why do you think things like Walter Reed happen? Answer, budget shortfalls.
http://blog.washingtonpost.com/earlywarning/2007/03/our_money_problem_and_walter_r.html
The military has a system of socialized medicine because the nature of their job makes them uninsurable by private carriers. They have to have that system because they don’t have a choice. But it’s not a system any of us should want.
Comment by UCrawford — August 6, 2007 @ 8:31 amAll these calls for government health care seem to be based on one argument.
The current (flawed private) system is awful, so let’s socialize medicine!! (Just forgo analysis about the upside and downside of socialized medicine or any alternative systems.)
Drugs cost too much, so let’s enact price controls!! (Just ignore its effect of killing the drug development industry.)
And we’re not even arguing in favor of keeping the current system. A deregulated system would create powerful incentives for preventive care and cost control at the consumer end and would create incentive to innovate and reduce the cost of delivering health care.
Comment by TanGeng — August 6, 2007 @ 8:44 amtom,
As TanGeng points out, please do not take this post as a defense of the current system. The current system is a failed hybrid of government and private systems, and does not deserve defense.
My point is that if we want to fix it, we should move government out of the way, and the the free market have a much greater role than they currently do.
Comment by Brad Warbiany — August 6, 2007 @ 10:10 amWhat make you all think there is no rationing with government run health care, Medicare?
Comment by VRB — August 6, 2007 @ 10:11 amWhat scares me, is that in the future your DNA will determine if you will be able to work. To save money on health care, which would not be for the sick any way, many people would just have to depend on the charity of others. I will probably be dead but my son and his children could be the beneficeries of this kind of a system.
Comment by VRB — August 6, 2007 @ 10:47 amVRB,
Sorry, but I don’t buy the whole “Gattaca” premise. Not unless the government does something really stupid and mandates that all employers are required to purchase health care for all employees (which wouldn’t be sustainable). In that circumstance genetic discrimination would be plausible because the employers would have a reason to discriminate. Other than that, it’s incredibly unlikely that there would be no employment for qualified workers simply because of their genetics. The benefits wouldn’t outweight the costs.
Actually, that would be a good argument for why we should push for a free market system instead of the current one that puts a focus on employer-provided health care. It creates an incentive to discriminate based on liability.
Comment by UCrawford — August 6, 2007 @ 10:59 amEmployer provided health care creates incentive to discriminate in hiring I mean, not the free market.
Comment by UCrawford — August 6, 2007 @ 11:07 amUCrawford,
Comment by VRB — August 6, 2007 @ 3:57 pmEmployers discrimante all the time, whether you as qualified or not. In fact in some jobs it is best not to qualified.
True, but they have less incentive to discriminate based on genetics if they have no financial stake in how healthy you are (employer-provided health care). In fact, if they’re following some types of pension plans they have a vested interest in hiring smokers and the unhealthy…less payouts, after all.
But I wouldn’t worry too much about the future turning out like “Gattaca”. As long as we live in a more or less free market society, and as long as there are workers capable of doing jobs, there will be employers looking to hire them regardless of who their parents were. Capitalism is nice that way.
Comment by UCrawford — August 6, 2007 @ 4:21 pm[...] Employers Charging Unhealthy Employees For Being Unhealthy (The Liberty Papers) [...]
Pingback by Reciprocity and subsidized health care « Blunt Object — August 12, 2007 @ 4:28 am