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Why Am I Paying For Your Chain-Smoking, Under-Exercised Ass?
As a 41-year-old woman who exercises rigorously, eats her vegetables, drinks maybe three glasses of white wine a week, and rarely uses her health care, my Kaiser HMO premium is $235 a month. It would probably be lower if I were charged based on my health habits and usage -- which is how it should be, but not, unfortunately, how it is. Radley Balko writes:

Health insurance is essentially the distribution of risk. A large number of people pay into a pool, managed by the health insurance company. The company operates on the assumption that only a few of its customers will get sick enough to require more money out of the pool than what they pay in.

The problem is that due to federal and state regulations, as well as tradition and custom, high-risk customers tend to pay the same or similar premiums as low-risk customers. So people who make good decisions about what they eat, how often they exercise, or what habits they take up end up subsidizing people who make less healthy decisions. It amounts to an incentive for unhealthy behavior.

This is only true of health insurance. Auto and life insurance companies regularly vary premiums with risk. If you have a poor driving record, drive a sports car, or live in a high-theft area, you're going to pay more for your car insurance than most.

There's no reason why health insurance shouldn't operate the same way. This is particularly true with state-issued health plans, where not only do you have the problem of subsidizing and fostering poor decisions, but the burden of those poor decisions then falls on taxpayers.

The question becomes, who should pay the health care costs of a state worker who chooses to smoke, then gets sick as the result of that decision: the person who chooses to smoke, or Georgia taxpayers? I have a hunch what most Georgia taxpayers would prefer.

Some may worry that we're on a "slippery slope," here -- "that health insurance companies may soon factor in traits and habits such as obesity, regularity of exercise, or alcohol consumption, too."

But why shouldn't they?

Think of it as a "live like an idiot" surcharge. I'm all for it.

Posted by aalkon at January 17, 2006 11:03 AM

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While I agree that it seems unfair to charge the same premium regardless of lifestyle, I do not think it is very practical (or desired) to do otherwise. How do the insurance companies ensure that their clients are actually following the lifestyles that they are covered for? Would you, Amy, be excluded from cover on a non-congenital heart problem on the grounds that your lifestyle makes any other kind of heart attack unlikely? Also, how does the insurance company measure other factors, such as stress?

Lastly, who pays for the insurance company to make clients adhere to these standards? Well, the clients, of course. So health costs go up for everyone.

I think the problem is really with the health care system. I don't know how to fix it, but it sure doesn't seem right the way it is.

Posted by: Silver_Fox at January 17, 2006 6:18 AM

Well, I think healthy nonsmokers should get a discount, and the cost of the discount should be applied to the self-indulgent.

Posted by: Amy Alkon at January 17, 2006 6:44 AM

This discussion came up elsewhere a few months ago and one person brought up an interesting point: what about people who by most criteria live a "healthy" lifestyle (non-smoker, regular exercise, etc.) yet participate in "extreme" sports with high rates of injuries (and consequently doctor/emergency room visits)?

While it sounds more fair, as Silver Fox pointed out above, it would be very tough to enforce.

Posted by: deja pseu at January 17, 2006 7:13 AM

Agreed -- with Silver Fox and deja pseu -- but Amy has a sliver of a point. I think it would be useful to offer some discount to, say, non-smokers willing to take occasional nicotine tests to prove it. It would encourage good behavior without cancelling out the larger benefit of spreading risk.

Comparing health insurance to auto insurance doesn't work. You can't be born with a genetic predisposition to drive like an asshole, but you can get a lifetime of health-care headaches through no fault of your own.

Posted by: Nance at January 17, 2006 7:45 AM

I'm sure all of you health nuts will be as glad to line up for your lifestyle screenings, and gladly submit to the quarterly blood tests, urine screenings and I'm sure the insurance companies will handle the process at least as well as the TSA.


Sorry Amy. Distribution of risk, like public education, is here to stay.

Posted by: John O at January 17, 2006 9:15 AM

John O writes:

I'm sure all of you health nuts will be as glad to line up for your lifestyle screenings, and gladly submit to the quarterly blood tests, urine screenings and I'm sure the insurance companies will handle the process at least as well as the TSA.


Sorry Amy. Distribution of risk, like public education, is here to stay.

John is correct. To say nothing of the 24 hour surveillance needed to verify that you're eating healthy. Whoops. You eat one doughnut a day. That's going to raise your premiums 12%.

Also, the government's idea of eating healthy isn't mine, or anyone else's who know anything at all about nutrition. The government would place us on ultra-low fat processed out of all nutritional value food for the rest of our lives. To say nothing of the fact that we would be taking vitamins with so much petroleum in them that pass right through us undigested. The tiles of the space shuttle should be as durable as a Centrum tablet.

Posted by: Patrick at January 17, 2006 9:38 AM

There's also the fact that health risks and health don't necessarily line up neatly. I eat all the wrong things, don't exercise, and am overweight. But the only thing I've been treated for in the last couple of years is a horrible lingering cough. It's looking like I have asthma. Is that the result of dating a smoker and being in his smoke for several hours a week? Or a result of working in downtown Columbus, where I breath bus exhaust for several hours a day, 5 days a week? Or a result of allergies?

Do I pay more for health insurance because I have a chronic illness? Or only if someone decides that the illness is a result of risks I've chosen to take?

Posted by: jenl1625 at January 17, 2006 9:39 AM

> Distribution of risk, like public
> education, is here to stay.

Yep. That's the point, spread it around a little. Do you want to calibrate premiums to behavior? There are two ways:

1. Ask people about their behavior and take their word for it.

2. Spy on 'em.

(Damn... Patrick already made this point)

Posted by: Crid at January 17, 2006 10:36 AM

>1. Ask people about their behavior and take their word for it... Spy on 'em.

Agreed. There's a chunky woman at my gym who runs for about an hour a day, at least six days per week. I also know a guy who mooches off his girlfriend and lives on a diet of sleep, sex and hamburgers, but is also built like a male model.

When they both say they excercise constantly, the insurer will think the wrong person is lying about lifestyle.

Since lifestyle is largely improvable and aesthetic condition is occasionally misleading, the only thing the insurer will have to go on will be family history. And are we really going to be okay when every woman whose mother's ever had breast cancer starts paying $15,000 a year in premiums once she turns 18?

This is kind of a moot discussion anyway, since I'd assume the majority of people who are insured and are pigs are insured through an employer that buys insurance in bulk and aren't about to scope out a local gym when looking for a candidate for
Senior Area Regional Statistician.

Posted by: little Ted at January 17, 2006 12:35 PM

I misspelled exercise.

Here's George F. Will on the claim that smokers cost the state health care system more money:

"The MSA rests on the fraudulent claim that smoking costs the states huge sums, principally because of health care costs. Actually, smoking makes money for governments, for two reasons. Cigarettes are the world's most heavily taxed consumer product (state taxes range from 5 cents to $2.46 per pack; the federal tax is 39 cents). And many smokers die prematurely from smoking-related illnesses, curtailing their receipt of entitlements for the elderly."

This is about state costs for health insurance, but the bold section should apply to private health care costs as well. It might cost a smoker's insurance $100,000 in his 51st year to help him die, but I'd wager that number is much lower than the amount it will cost a non-smoker's health insurance over the twenty years he or she is in a nursing home, drooling on two recent hip-relacements and being forcefed thirty pills a day. So by this rationale, Health insurers should cut the premiums of smokers to encourage more people to smoke, so the insurers' costs can go down. Is this right? To offer incentives to the insured to kill his or herself before he or she costs the insurer more money?

>say, non-smokers willing to take occasional nicotine tests to prove it

I don't use Cocaine, but I wouldn't want to live in a society where I have to submit to monthly coke exams for no particular purpose.

If you wreck your car, your premium goes up because you've just cost your insurer more money. If you live next door to a crack house, your theft insurance might be more because there were so many more burglaries over the last year in that area than the rest of the city combined. Solid reasons.

Our understanding of health is still in its infancy. It's still an elusory thing. We can't decide if mustard gives you cancer or prevents it. Is meat the best thing you can eat or the worst?

There is no agreement on nutrition. A weightlifter will tell you something different from a Vegan who will tell you something different from a doctor. They all have their points, and you can usually see good results in the first two, apparently gained from following his or her own advice. The doctor might look like he's in worse shape than a sumo wrestler, but also knows more about human anatomy than any of us non-physicians ever will. Who has it right, here?

What we do know is bad for you (smoking, Pepsi) or good for you (exercise, Vitamin C) is impossible to verify without allowing yourself to be spied upon by a for-profit enterprise who'll probably sell any extraneous information they obtain during that process to telemarketers, spammers and internet ad services.

Variable health insurance rates should never happen, mostly because the concept is just too creepy.

Posted by: little Ted at January 17, 2006 1:28 PM

Ted, those are some fascinating points. However, while we are playing "what-if," let's imagine the insurance marketplace wasn't the massively regulated bureaucracy that it is today, and that it was easy for new companies to enter the market, set their own prices, and compete with existing ones.

I think the market would solve this problem. On one hand you have what you say - healthy people paying cheaper premiums but having to be spied upon. Wouldn't the cost of such a spying information system be prohibitive? Insurance companies would have to hire all these employees to spy on insureds, which could negate any cost savings those insureds got in the first place, since the cost of the information system itself would eventually be passed to them through their premiums.

Various insurance companies would try various levels of spying (and spend corresponding amounts of money to do it), and some consumers would be unwilling to be spied upon in order to save a buck or two and would pay somewhat higher premiums for their privacy. Eventually it would work itself out.

Posted by: Pirate Jo at January 17, 2006 3:17 PM

Hey, Whoa, Wait a Minute!

This is really, really close to asking for state-run health-care. Why is that bad? Because the monitoring methods lend themselves to enforcement measures nobody will like. Pretty soon, you'll see pressure: "I'm sorry, madam, but being single and 41 years old is off-normal. We're going to raise your health-care rates - unless you get married", or "You own a shotgun and a motorcycle. No insurance for you." It'll happen because monitoring is far more expensive than actuarial tables.

I asked around at work, and I was amazed to find out people don't know the basics about "health insurance" anyway - I mean, what the risk "universe" is.

Posted by: Radwaste at January 17, 2006 3:20 PM

Maybe I'm missing something, but my health insurance company already discounts my premium and that of my husband since we do not smoke. I had to swear I was smoke-free when I took out the policy and I am subject to surprise testing by an agent who would come to my home and take samples (I guess, since it hasn't happened in the 14 years I've worked where I work.) I can't tell you how much money is saved since I do not pay for my insurance out of pocket-- it is all covered by my employer.

Posted by: Bev at January 17, 2006 6:12 PM

This is being considered in Australia (where I currently live). Yet another reason for the nicotine patch currently on my arm right now!

Posted by: Vickie at January 17, 2006 6:23 PM

Actually in Michigan there is a company that fired employees for smoking. They at first offered assistance to quit, then made a company wide ban.

Also in MI, for Medicaid the State is trying to get a federal waiver to allow that residents that apply for medical assistance sign a "health responsibility agreement".

Kaiser, well I am suprised they are not rewarding you with your healthy choices, they are considered one of the premium/cutting edge healthcare organizations in the nation.

It is so much more fun to talk about iron workers :)

Posted by: Sonja at January 17, 2006 7:51 PM

>I'm sorry, madam, but being single and 41 years old is off-normal. We're going to raise your health-care rates - unless you get married

Wow, I never even thought of that. That beats anything I've got.

>I think the market would solve this problem

I see your point, and generally speaking I agree that the market takes care of most things anyway.

I have a hunch that replacing the entire FDA with a law requiring that drug companies conduct and publish 10 studies about (every study must be published, no cherrypicking) before they can put a product on the market. If a company does something harmful knowingly, they will be sued out of existence. The risk of putting a drug like Ephedra on the market then makes the prospect of doing so potentially corporation-killing, and we'd have never heard of it. There's also the added blessing that the lovely ladies of this country's nightclubs could now be taking that newfangled morning after-pill (that's safe for adults but might kill teenagers according to the FDA), thus reducing the number of mistakes (AKA little Federlines) who'll be swarming the west coast in ten years.

However, the market doesn't take care of everything. When's the last time you called any large company and had a human being direct your call? There's a huge demand for that. Think there will still be any banks in 2020 that don't charge to see the teller?

I suspect that markets don't affect health insurers nearly as much as they claim. I think health insurers are playing with a rigged deck. I think they're colluding. And I know there's some vertical integration going on. But that's another discussion.

Posted by: little Ted at January 18, 2006 12:10 AM

>It'll happen because monitoring is far more expensive than actuarial tables

I can't get enough of this great point.

Imagine a young widow who loses her husband in Iraq being told that her premiums have been doubled becuase young widows cost the insurer more money in psychiatry fees.

Posted by: little Ted at January 18, 2006 12:24 AM

What about genetic profiling? Your insurance premium could depend on your DNA. We already do this to some extent. People with XX on chromosome 23 live several years longer than people with XY, and premiums already take this into acount. Also, some inherited diseases can be identified, and I guess will affect your premium. The next step will presumably be that people with, say, genes that dispose them to heart attack or osteoporosis or whatever will pay more than those without those genes. There's no need for spying or anything: just one mouth swab when you take out the policy.

Posted by: Norman at January 18, 2006 1:13 AM

You know, maybe such a system would be a good way to ensure the survival of the fittest. After all, only the healthy would be able to afford health insurance, so the unhealthy people would die. Then only the healthy will have children, who would also be healthy, and pretty soon everyone is healthy.

Of course, we have never had any great people who were physically unhealthy (Roosevelt, Hawkins, Churchill).

I know that this is setting up a strawman, but, really, where do we draw the line on how to insure people? And as for relying on the market to hold our best interests ... whatever. The market is all great when competition is feasible, but it is not always so. Look at the RIAA, OPEC, Microsoft, etc. The options may be there, but they will never be feasible when we have corrupt politicians and CEOs with no interest but money, and things will never change when people are so ignorant.

There is no silver bullet.

Posted by: Silver_Fox at January 18, 2006 6:03 AM

"(AKA little Federlines)"

That was a mistake? I suppose you wouldn't trade places with the fellow, then? From here it looked like active genetic engineering. Whatever the brainpower, nil to max, the fitness issue was covered. But I digress. There's a kid who'll never have to horn in on your Medicaid.

Posted by: Radwaste at January 18, 2006 2:53 PM

>I suppose you wouldn't trade places with the fellow, then?

I'm just saying that it seems every woman Kevin Federline looks at ends up having two of his kids. If the morning-after pill (or whatver the new one's called) could prevent even one of his seeds from coming to fruition that might lower the chances that a little Federline could follow daddy's footsteps into the creation of a horrible rap album.

But point taken about him and Brits spawning a superhuman master race comprised entirely of cretins.

Posted by: little Ted at January 19, 2006 12:40 AM

Why? Because the insurance companies will tell an eleven year old child with juvenile diabetes that they drank a soda at recess in the 1st grade, so they're going to have to pay for treatment themselves or die.

What about someone who gets lung cancer, but swears they've never smoked? Do we pay for it or let them die because they 'must' have smoked. After all 'good' people don't get lung cancer, everybody knows that (at least everybody wants desperately to believe it).

Posted by: Shell at January 19, 2006 8:40 PM

I'm not talking about somebody who gets lung cancer but never smoked. I'm talking about willful self-indulgence paid for by the rest of us. You're obese? You pay a fat tax. You smoke? You pay a fucking moron tax.

Posted by: Amy Alkon at January 19, 2006 9:36 PM


Then I, who lives in Seattle, should be allowed to pay lower health insurance rates than you, who lives in Los Angeles, right? After all, the air pollution is worse in LA, and LA is definitely more dangerous (i.e., crime). Therefore, you are indulging in "willful self-indulgence" by remaining in LA and not moving to Seattle, right? (And no, I won't make any snarky jokes about the number of people who've moved here from LA alreasy.)

Posted by: David Crawford at January 21, 2006 4:27 PM

Actually, I live at the beach, on a little-trafficked residential street, and I'm always freezing (because I'm thin, my doctor says, not because I'm anemic, thyroid-deficient, or something), so the door to my house is usually closed...thus making me less likely to suck down particles. So, hah!

Posted by: Amy Alkon at January 21, 2006 5:05 PM

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