Healthy lifestyle discount or insurance loophole?

January 7, 2010

Dozens of healthcare reform advocates are sounding alarm bells over a Senate proposal to allow companies to reward employees who quit smoking, exercise or engage in other healthy activities.

The groups, including the American  Heart Association, say the measure would create a “dangerous”  loophole that would allow insurance companies to discriminate against people with health problems if it is included in the final healthcare yoga2reform legislation.

The healthcare overhaul aims to stop insurance companies from excluding coverage for people with pre-existing conditions or charging people more based on medical history. But Sue Nelson of the American Heart Association said the provision is written in a way that would allow insurers to raise premiums but then provide discounts, as much as 50 percent, for people who quit smoking or join gyms and exercise more.

“Although described as  ‘incentives’ this practice allows employers to raise costs across the board for everyone and then lower them selectively for those who meet certain health targets. Incentives quickly become penalties for those who cannot meet the targets,” Nelson said.

Supporters of the provision argue that encouraging people to quit smoking or engage in a healthy lifestyle would help bring down soaring healthcare costs. Current law allows up to 20 percent premium discounts for people who engage in employer-sponsored wellness programs.

The provision was added in the Senate Finance Committee as an amendment offered by Republican Senator John Ensign and Democrat Thomas Carper. Committee Chairman Max Baucus supported the measure, but at the time said it needed refinement.

The healthcare advocacy groups said they prefer the House version, which provides incentives to small businesses to sponsor wellness programs for workers. Grants would be awarded for up to 50 percent of the costs of the program.

The Senate version also calls for a government study on how wellness program incentives impact the quality and cost of healthcare.

What do you think. Should employers and insurance companies offer premium discounts to people with healthy lifestyles or is it just a way for insurers to continue the practice of basing premiums on medical history?

Photo Credit: Reuters/Jamie Fine  (Yoga students at the “OmFactory” yoga studio in New York.)

5 comments

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I like the target-based discounting system, with respect to recieving incentives for quitting smoking and joining gyms. I mean c’mon, there’s no such thing as a free lunch. If you want your premiums to go down, live a healthier life. To be honest, though, people with re-occuring health issues that are out of their control, need to be accounted for. But the whole premise of insurance is based on the industry’s ability to discriminate otherwise they could be forced into bankruptcy.

Posted by charlesv | Report as abusive

I already quit smoking – 10 years ago, attend the gym, don’t drink, don’t abuse drugs – so there’s no “incentive” for me. Yet the ones still enjoying sinful lifestyles are lined up to get all the incentives. Hmm, looks like I should start smoking again, and maybe try the weed – to get paid for giving these habits up.

Posted by An0nym0us | Report as abusive

The most expensive pre-existing sickness of all time is the delusion that it’s OK to pay insurance companies a whole lot of money for adding absolutely nothing of value to the health system.

Posted by HBC | Report as abusive

The citizenry has lost the health care issue. The insurance companies have emerged victorious and the citizen will now be forced to buy under penalty of law.

Enjoy your “health care”.

Posted by Benny_Acosta | Report as abusive

It is still the unpublished portions of the Obamacare Bill that bother me. Should not America be able to see it all.
I’d like to see what this has in it. Obama has made it way too important for it to be only about healthcare.
What little “weiners” of Juicy ” Constitution killing “Healing Herbs and Viniger Balancing ” is hiding in the depths of the legeslation???

Posted by jackolantyrn356 | Report as abusive