Last week, a controversial proposal was put forth by the governor of Arizona looking to recoup some of their Medicare program costs. In essence, smokers and the obese will pay a $50 annual fee; diabetics that don’t improve their health could face a similar penalty. For some reason, this only appears to affect childless people which doesn’t make a lot of sense to me, but I digress. There are many sides to this debate, so here are some thoughts:
Unhealthy People Do Cost More
This bothers people, especially those who are a drain on the health care system resources, but it’s obviously true. It’s not appropriate to vilify someone born with a disorder or someone who suffers from some sort of malady they acquire later in life, but the fact is a small portion of the population consume the a disproportionate percentage of healthcare dollars. So, the natural question is – should they pay more?
Penalizing People for Their Health?
It’s pretty messed up to be assessed a higher fee for something out of your control if it’s you though. So, if you’ve had diabetes since you were a child, you should have a higher charge for healthcare? How about if you’re a woman? Medical expenses are higher for women than men over a lifetime. So, women should pay more? Much depends on perspective. If you’re the person paying more, you feel like this is totally wrong. If you’re trying to be completely objective and looking purely at the cost component, it might make sense to basically charge people solely based on actuarial risk.
The Whole Point of Insurance Is To…
Cover outliers. You buy car insurance so that in the rare circumstance that you cause an accident, your costs will be covered by other people with a perfect record. You are also then compensated by someone of no means who had the minimum insurance required and companies even offer uninsured driver insurance for accidents. We all buy homeowner’s insurance but don’t expect our house to burn down. The intent of an insurance pool is to use actuarial statistics to present a reasonable profit to the administrator while imposing appropriate fees to various participants depending on their risk. But these risks are often muted, or merged so people aren’t too far outside the norm. This has traditionally been the problem with private insurers providing insurance for someone with a chronic health condition. Chances are, there’s no premium this individual could pay that would ever cover the cost of their care – so insurers just refuse to provide coverage!
$50 Fee Is A Laughable Waste
I don’t see the point in assessing a $50 charge. Primarily, the millions of dollars the state will have to spend defending lawsuits, promoting this legislation and then administering it will be a net loss. $50 per year isn’t going to deter anyone from smoking or being unhealthy. Seriously. $4 a month to stop smoking? Others might have just bought a vaporizer since it seems to be the trend now because of its health benefits than smoking (Check this G+ profile to learn more about handheld vaporizer) Cigarette taxes go up constantly and people keep smoking. $4 is one fat burger. It’s a joke. States should either do nothing – or enact a penalty commensurate with the actual cost component of the behavior they’re trying to change.
Personally, I’m all for incentivizing people to take better care of themselves. Our poor health is bankrupting the country, make no mistake. I just don’t think this will be effective. We also shouldn’t be vilifying people that happen to be unhealthy whether through their own fault or not. We should get real about the cost-effective delivery of healthcare, get real about the level of service the government can and should provide, and incentive better outcomes rather than just penalize people with the equivalent of a latte per month.
What Are Your Thoughts?