Tuesday, July 05, 2011
Health Insurance Incentives May Improve Costs & Health
The US health care problem is a fairly complex one with multiple challenges.
First, our healthcare system is highly advanced and technological. That makes makes it inherently expensive.
Second, health insurance is very costly and beyond the reach of the average American.
From 1999-2009, health insurance premiums for families rose 131%, while the general rate of inflation increased 28% over the same period.
As a result, one in seven Americans did not have health coverage in 2009.
However, those people don't go entirely without healthcare; they just don't pay for it much of the time. People with insurance end up subsidizing them through higher premium costs.
Third, the US is the fattest country in history. Fully two-thirds of Americans are overweight or obese. Consequently, the nation is plagued by lifestyle diseases, such as heart disease, strokes, Type II diabetes, high blood pressure and high cholesterol.
Though these diseases (and many cancers) are preventable through lifestyle changes, too many Americans are unwilling to undertake them.
According to the Centers for Disease Control and Prevention (CDC), 50 percent of a person’s health status is a result of personal behavior and choices.
Consequently, it seems self-evident that the incentive to maintain one's own health is both inherent and self-fulfilling. But somehow it isn't.
Insurance giant UnitedHealthcare, the nation's largest health insurance provider, decided to provide the incentive a few years ago.
United makes those who disregard their health pay more for insurance. And it rewards those with positive health profiles by charging them less.
It seems quite reasonable that overweight people, smokers, and those with high cholesterol and high blood pressure should pay more. It's both fair and practical that Americans take more responsibility for their own health.
Here's how the program works: Employers offer a high-deductible insurance plan through UnitedHealth, such as a policy that requires single workers to pay their first $2,500 in annual health costs before insurance kicks in; for families it's $5,000.
Workers who want to lower their annual deductible can volunteer to have blood tests and other evaluations once a year to see if they smoke and if they meet target goals for blood pressure, cholesterol and height/weight ratio.
For each of the four goals they meet, workers would qualify for a $500 credit as individuals or $1,000 as families toward the deductible. If they qualify for all four — and UnitedHealthcare estimates that few will initially meet all four — their annual deductible would fall to $500 for individuals or $1,000 for families.
The key is that the plan is voluntary. People can always choose to not participate and to pay more.
Those who don't meet the health standards can sign up for weight loss and other health management classes through United.
This program makes sense in the same way that a good-driver policy discount makes sense.
Some people may need help, guidance or education. But we all need to take responsibility for ourselves and for our health outcomes as well.
Ultimately, this type of policy only considers the things an individual personally controls.
Rewarding people to take care of themselves may seem counter-intuitive, yet this is the current state of affairs in America.