Should Your Employer Be Charging You For Bad Health Habits?

Posted on Mar 01, 2009 by Andrew in Diabetes, General Health & Fitness, Health Care, Uncategorized, Weight Loss .

You’ve heard the studies on weight loss and cash incentives, how people tend to lose more weight when there is a pot of gold at the end of the rainbow. And I’m sure you’re familiar with the television application of this in THE BIGGEST LOSER. So why wouldn’t your employer get in on the action?

But aside from providing incentives for weight loss, should your employer be charging you for bad health habits? The Harvard School of Public Health takes a look at this issue:

Companies have long had an interest in keeping workers healthy, productive, and satisfied while cutting health-care and insurance costs. Increasingly, though, they are using incentives—and disincentives—to rein in these costs’ runaway growth.

So far, tobacco use and obesity are getting the most attention. To prompt workers to stop smoking and lose weight, employers are, among other things:

adopting no-tobacco policies on and off the job

offering cash-incentive payments and gift cards

reimbursing workers for gym memberships

providing free health coaching

offering insurance-premium discounts to those who meet health standards—and surcharges to those who don’t”

So what are the “costs’ runaway growth”? Which bad health habit costs tax payers the most? (Rand.org):

Obesity is associated with a 36% increase in inpatient and outpatient expenditures and a 77% increase in medication costs than people falling within a normal weight range, while current smokers see increases of only 21% for services and 28% for medications over those of non-smokers, and problem drinkers see an even lesser effect for both.”

It’s obvious that given the increase in obesity in America coupled with the above information showing that obesity ends up costing the most in terms of health care, something needs to be done. But those are just the percentages. How does the obesity epidemic break down in terms of dollar amount per person? (ERS/USDA):

The lifetime medical costs related to diabetes, heart disease, high cholesterol, hypertension, and stroke among the obese are $10,000 higher than among the non-obese. Among the overweight, lifetime medical costs can be reduced by $2,200 to $5,300 following a 10-percent reduction in body weight. Obesity also has externalities associated with it—namely, mortality and health insurance costs. Because medical costs are higher for the obese and premiums do not depend on weight, lighter people in the same pool pay for the food/exercise decisions of the obese.”

So let’s use the 10,000 number here. The CDC estimates that in 2007, 25.6% of Americans were obese. The U.S. Census estimated the population to be at 301,621,157. So that means, 77, 215,016 Americans were obese in 2007. If we use the $10,000 number, that means that over the span of a lifetime, obese Americans as a whole cost an additional 772 billion dollars in health care.

What are your thoughts, given the current economic situation? Is it fair for employers to charge for bad health habits in light of this data? If employers do not innact a fee for bad health habits, do you feel that skinny people should receive premiums?

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Tags: bad health habits, cost of obesity, cost of smoking, employer fees for bad health habits, fitness, health, Health Care, no-tobacco policies in the workplace, Nutrition, obesity, percentage of obese Americans, quitting smoking incentives, weight loss incentives, which companies charge for bad health habits?, which costs more obesity or smoking?

2 Responses to “Should Your Employer Be Charging You For Bad Health Habits?”

Tuscanystone

Mar 02, 2009

5:19 pm

I don’t beleive in any kind of segregation whatsever! People are equal and should be treated as such. Next they will be charging people for being asthmatic or disabled or short or tall or for having sickle cell or cancer as they cost more to treat! ? Did you know that tall people are more likely to get heart diseases than short people?

Anyway, you get my point…..

I’m all for incentives tho, and love the company gym or creche or health coaching idea. Yeah, that’s all cool

Tusc

Reply to this comment
- Andrew
  
  Mar 03, 2009
  
  10:18 am
  
  That’s a good point Tusc. It could end up being a slippery slope that lead to inappropriate charging. I think that employers should definitely start by focusing more on the incentives, getting creative with them.
  
  All the Best,
  
  Andrew
  
  Reply to this comment