Saturday, November 25, 2006

Is Fair, Fair?

According to a recent study in the Health Affairs Journal, almost two thirds of those surveyed believe that smokers should have to pay more for health insurance; about a third felt that obese folks should, as well.

We talk a lot about personal responsibility here at IB, but have so far shied away from this particular controversy (mostly because it’s been somewhat under the radar). But we have discussed the importance of “risk” many times, and this would seem to fall squarely in that milieu.

Longtime readers may recall the IVF kerfluffle some time back: we sometimes forget that behavior choices have consequences. Certainly smoking falls under that heading: I’m aware of no medically-approved treatment plan that mandates one to “light up” (medical marijuana use notwithstanding). Smoking has been linked to any number of health risks, and of course smokers are subject to an increasing number of restrictions on their behavior.

Weight is another such issue: obesity can increase one’s chances for heart attacks, diabetes, and other dread diseases. Overweight folks might argue that they are subject to metabolic challenges that affect their condition, and there is probably some justification for that. Nevertheless, their condition does affect their health; underwriters are less interested in the why than in the fact.

In the life insurance and individual medical markets, smoking status and weight have long been used in assessing one’s rates. In the group market, though, these issues receive considerably less play. Generally, group plan underwriters look at the results of the behavior (cancer, diabetes, stroke, etc) when determining final rates for a group. I haven’t (yet) seen a group screening questionnaire that asks about smoking status of employees; likewise, there’s been no evidence that the behavior itself plays any part in the underwriters’ decisions.

But, if there’s enough of a demand, the industry will most likely respond. At some point, some carrier will announce a special discount for smoke-free groups, or some other program along those lines. It will be interesting to see when (not if) that happens.


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