Should Healthy People Pay Less for Health Insurance?
September 19, 2007
Why did you sign up for health insurance? Was it to help share the risk and cost of potential health issues across a large group of people? What if some of the people in your group are voluntarily behaving in ways that raise their risk and the cost to you and everyone else? Should you be offered a discount on your deductible for abstaining from those behaviors?
Getting “Credit” for Being Healthy
One of the largest health insurance companies in the US, United
Healthcare, has launched a pilot program called Vital Measures that is intended to “reduce out-of-pocket health care expenses for individuals and families with healthful lifestyles”.
The program creates incentives for its members to adopt healthy behaviors. According to the Kansas City Business Journal, participants in the United Healthcare pilot program take tests to measure their health against body mass, cholesterol, blood-pressure, and nicotine usage benchmarks similar to those set by the National Institutes of Health. Any member that is in line with or better than the benchmarks earns credits towards their deductible.
Is a Health Credit Legal?
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) does contain guidelines about imposing different premiums or deductibles based on health factors. However United Healthcare has implemented the Vital Measures program to use a high-deductible health care plan along with a fully insured supplemental plan from Benicomp Group that can reimburse deductibles or co-payments, which is thought to be exempt from HIPAA.
The press release announcing the pilot program offers the following description:
“A typical Vital Measures program design might combine a $2,500 deductible medical plan with a supplemental plan that allows the employee to earn up to $2,000 in deductible credits if each of the four health benchmarks are met or exceeded. “
Employer Health Costs
The driving force behind Vital Measures is likely the increasing cost of health care that employers are having to shoulder. Companies are looking for ways to lower these costs and United Healthcare responded with a program that encourages plan members to take action to control their health care costs.
The chief medical officer for United Healthcare, Sam Ho, offers an interesting statistic:
“More than 70 percent of health care expenditures in the United States are spent on treating conditions that are lifestyle-related and can be potentially reduced by more healthful lifestyle changes.”
Of course “lifestyle-related” is a pretty broad term which could cover many different things but I can see how some purely optional behaviors could really increase the cost of health care for some people.
Good Idea, Bad Idea?
What do you think? Is this kind of plan a smart move? Do you think its fair to shift more of the cost to the people that choose to engage in higher health risk behaviors?
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