Money, Muffin Tops and the Future of Health Care Costs

December 15, 2008 by  
Filed under Insurance, Money and Behavior

Yes I know that title is a little strange for a Mr. ToughMoneyLove Monday morning article but bear with me.  It is indeed about hard truth and your money.

We are now in the peak holiday party period.  You and I are being confronted regularly with arrays of tempting food and drink, most of it not good for us.  I am trying very hard to be a good boy since I lost 52 pounds earlier this year and I do not want to backslide.  (Had to throw that one in – it is my birthday present to myself.)

This is also the time of year when people start contemplating the ubiquitous (and rarely to be complied with) New Year’s Resolutions.  I haven’t researched this but I feel comfortable in stating that “lose weight” and “save money” probably run in the top 5 on most lists.

Well it turns out that money and weight are more closely tied together than perhaps some of use were aware.  

As reported in a Wall Street Journal blog,  a study of overweight adults concluded that those who were paid to lose weight were much more effective in accomplishing their weight loss goals than those who did not receive a financial incentive.  In other words, for the obese and overweight in this study, money makes the pounds come off.  And those actual health benefits from weight loss?  In comparison to money, who cares?  (if you are interested, here is the actual JAMA study abstract.  Thanks to reader Matt for the tip on this.)

If you think about it, that is a very sad commentary on human motivation in our society.  Mr. ToughMoneyLove likes money as much as the next guy but please folks, let’s look at ourselves in the mirror and not let dollar signs obscure those muffin tops and extreme love handles.

So how does this psychological curiosity affect the rest of us, including those who are not overweight?  Most of us pay for health insurance, either directly or indirectly.  For private or business group insurance, our premiums are based on the health experience of others in the group.  Unfortunately, most of those “others” in the group are and will continue to be overweight.  Some experts predict that based on current trends, 86% of Americans will be overweight by 2030.  In money terms according to those same experts, almost a trillion dollars will be spent on weight-related health conditions, representing one of every six dollars spent on health care overall.  Wow.  Can you say pass the gravy?

I don’t know about you, but I am not interested in spending my tax dollars and insurance premiums supporting other folks’ fat maintenance programs.  And yes, it will cost all of us.  With the Obama team on the way, the move toward a national health insurance and/or health cost sharing program will accelerate.  As that happens, increasing attention should be paid toward the cost factors associated with being overweight.  In fact, some state governments with lots of fat people on the payroll (sorry Alabama, too much barbecue and cornbread I guess) will be charging overweight employees $25/month for health insurance that is provided free to employees who are not overweight.  (Do you think they read that weight loss incentive study?)

Some people don’t think that being overweight is a good reason to be charged more.  Our dear friends at the ACLU have already coined a phrase for this:  “lifestyle discrimination.”   The ACLU has decided that it doesn’t think much of lifestyle discrimination in the workplace.  You can be sure that the ACLU “fat people action team” will be telling the Obama health care team not to make the overweight pay any more than the rest of us for workplace or government sponsored health care.  Maybe we all should send copies of the JAMA study to our Congresspersons so that they will know that money can be a powerful weight loss incentive.

Be ready taxpayers.  This will be a huge issue and an important one for your wallet and tax bill.

In response to the ACLU position, I enjoyed this tongue-in-cheek comment left at one news article about what the state of Alabama is planning for its overweight employees:

This is discrimination plain and simple. Fat people are not responsible for their physical state. Alabama should tax KFC, McDonalds, and the cable TV companies to cover the cost of health insurance. Fat people unite!

I couldn’t have said it better myself.  What do you have to say about it?  (And stop eating those Christmas cookies.  No?  How about if the government gives you a quarter?)


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Comments

9 Responses to “Money, Muffin Tops and the Future of Health Care Costs”
  1. TMN says:

    I agree with this for the most part. Engaging in risky behavior should not entitle you to coast on the collective dime. But I think you’re too quick to write off the ACLU’s position. Right on the page you linked to, they have the following:

    ——————————
    “Q: Can’t employers just charge a premium to employees whose activities raise the cost of health insurance?

    “A: Often, an employer claims to be charging “unhealthy” employees a premium over the “normal” rate, while some employers claim to be giving their “healthy” employees a discounted rate. Either way, however, some employees are required to pay more for health insurance than others.

    “This may not be wrong in principle, but the employer should be able to justify surcharges imposed on an employee whose lifestyle is deemed “unhealthy” with sound actuarial data. The employer should be able to demonstrate that an employee’s behavior increases the employer’s health care costs by a measurable amount. The employer should also be required to show that the surcharge is not discriminatory — that is, does not fall disproportionately on racial minorities or other protected groups.”
    ——————————

    They don’t appear to want to block anybody from assigning the costs of health care appropriately. They just want to make sure the issue doesn’t drift into areas of excessive corporate control over workers’ free time activities with only loose justification. It’s only fair that companies provide substantial factual basis for decisions like this.

  2. AG says:

    I have discussed a similar issue with one of my best friends and neighbors. Our conclusion was that it is totally fine charging overweight people more for healthcare.

    Sure, if the person has a health issue that is out of their control and causes his or her being overweight due to metabolism issues this fee should be waived (example: Hypothyroidism, etc.).

    If the ACLU is successful in stopping this “premium” they should attack car insurance prices for individuals under 25 next. My premiums dropped about $400 for the year the day I turned 25 and I even added an umbrella policy and upped my coverage! By the way, I have never been in wreck that was my fault and should only have one traffic violation on my record (minus parking ticket, but I don’t think they even go on your driving record). I feel that State Farm was discriminating against my lifestyle because they thought I drove faster, more aggressively, and less carefully than I do now.

    I would love to meet the person that said “Fat people are not responsible for their physical state.” What an idiot! No one told you to eat KFC or McDonalds, and no one told you to super size your value meal. Seriously.

    On a personal note I think auto insurance companies should start charging individuals with Blackberries or that frequently text wile driving a premium (http://news.bbc.co.uk/1/hi/uk/7621644.stm), apparently it is worse than drinking and driving.

  3. TMN – Thanks for your comment. I had read that statement from the ACLU and it still bothered me for three reasons. First, it used the term “sound actuarial data” which is always open to interpretation. Second, it used the phrase “employee behavior” whereas the ACLU might take the position that being overweight is a disability issue, not a behavior issue. Third, the ACLU makes vague reference to “other protected groups.” Keep in mind that sound actuarial data shows that women cost health insurance companies a lot more than do men, yet all attempts to charge women more are vigorously opposed because they are in a “protected group.” So, no, I have no confidence that the ACLU will let the government charge overweight people more for health care.

  4. Lurker Carl says:

    Health insurance is used as complete coverage for all medical procedures. No wonder medical care and insurance is expensive. It’s like taking your car in for an oil change and expecting the automobile insurance company to reimburse you. If these policies changed back to people paying for routine procedures with insurance picking up the major injuries and illnesses, costs would decline for both medical care and insurance premiums.

    I doubt if that would actually make anyone healthier but it would remove the ACLU from the equation.

  5. At my work, insurance is cheaper if you don’t smoke. I don’t really see the difference between that discount and a normal weight discount. Doesn’t cost you (or me) a dime.

  6. Matt SF says:

    Interesting timing… checkout this “fat tax” article that came out of New York this weekend.

    http://www.nydailynews.com/ny_local/2008/12/14/2008-12-14_governor_paterson_proposes_obesity_tax_a-1.html

    Personally, I’ve often wondered why high fructose corn syrup containing sodas always cost less than diet sodas. Is it due to higher manufacturing costs, or a way to stick it to those who want a no/low calorie substitute?

    Good find on the “86% overweight by 2030″ study. Another reason to invest in insulin producing pharma/biotech companies.

  7. Ahh, the sanctimony (is that a word?) of the newly thin… :)

    Congrats on the weight loss – a great achievement. However, the hard part is keeping it off…ALL of it off – don’t let any of those pounds creep back on.

  8. dwhite2762 says:

    The insurance industry considers women a risk group and charges more for women’s health than men even though women live longer and are healthier than men. So, are you in favor of this? Try putting yourself in another’s shoes for a minute. Reflect on the recent case where one 4 month old baby was rejected for health insurance because the baby was too fat. The baby was still nursing. The same month, another child was rejected for being to thin (in Colorado). Are you proposing the insurance should go higher in price because you get older and you are now at risk of being sick? The enemy

  9. The insurance industry charges more to people who cost them more. Women use far more health care resources than do men, which is why they get charged more. The PC people have been changing that by law which is too bad, because that will make insurance more costly for all of us. Fat people use more health care resources than do thin people because they are fat. They should pay more or lose weight – it’s their choice.

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