Will the Obese Be Penalized by Insurers Like Smokers

A small but growing number of employers charge smokers more for their health care than they do for nonsmokers. But as evidence continues to link unhealthy lifestyle choices to health care costs and lost productivity, another question arises: Are obese workers next?

If you ask employees, the answer is a “maybe.” In a recent survey by the National Business Group on Health, 65 percent of 1,619 employees at large companies said they believe smokers should be charged more for health care than nonsmokers. About 49 percent surveyed said they would support higher premiums for obese workers.

Smokers at JPMorgan Chase have for years been charged more for health care than nonsmokers. A smoker in New York with a plan through UnitedHealthcare pays about $85 every two weeks, compared with a discounted rate of $70 for nonsmokers. The policy is meant to encourage smokers to take cessation programs and receive the discounted fee, says Wayne N. Burton, JPMorgan’s corporate medical director.

“This motivates them to quit,” he says.

But Burton is doubtful that such a program for obese workers would pass legal muster. Federal HIPAA guidelines prohibit differentiating premiums based on medical conditions, with the exception of smoking. Employers can offer discounts to nonsmokers, as in the case of JPMorgan, if they offer smokers programs to help them quit.

“I can assure you there are no plans to do it outside of smoking at this time,” Burton says.

Part of the problem may be cultural. Smoking is no longer as widely accepted as it once was.

“Everyone is willing to penalize smokers,” says D.W. Eddington, director of the Health Management Research Center at the University of Michigan. “[Employees and employers are] not willing to penalize overweight people, but everyone is willing to penalize smokers because smokers irritate people even from six feet away.”

Some recognize the slippery slope that may result if more employers differentiate their premiums between smokers and nonsmokers.

“Where do you draw the line?” says Edward Kaplan a consultant with the Segal Co. “In closed circles, clients ask me if we should rate premiums based on income, BMI [body mass index used to gauge obesity] and whether they smoke.”

But, he adds, employers are usually chastened by any legal implications and possible bad publicity.

More likely, these experts say, are programs that try to use incentives to get people to change behavior. It’s possible, though, that as employee attitudes begin to shift, so will employers’ willingness to charge unhealthy people higher premiums.

“There’s a lot of momentum around individualized health plans and more accountability within the population,” says Kaplan, “so maybe we’ll see more of it.”

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