This seems like a fair, justified, and decently effective approach to addressing larger issues with health and health care.
Says Karen L. Handorf, an employee benefits lawyer in Washington,
Employers cannot discriminate against smokers by asking them to pay more for their insurance unless the surcharge is part of a broader effort to help them quit.Many company's plans offer smoking cessation programs, or reduce surcharges for workers seeking to quit. Furthermore, plans factor in accommodations for health issues that can't be helped--for instance, a medical condition such as nicotine addiction making it dangerous or impossible to quit smoking would exempt or reduce the surcharge for such an employee.
Jerome Allen, a part time Wal-Mart employee, discovered that he was paying a monthly $40 smokers' surcharge and has since quit smoking. Other surcharge plans can total up to $2000 a year--not an insignificant sum, and not an insignificant reason to quit.
If a surcharge incentive is what it takes to encourage positive lifestyle changes, I say it's well worth utilizing. At the surface, adding a surcharge only effects a cost-shift, not a true cost-reduction. However, given that it's ultimately the workers benefiting from health care, and the workers that must themselves be the ones to effect any change, shifting costs towards workers that have the power to act and respond to such incentive does seem like the intuitive course of action. It shouldn't matter so much whether the incentive is positive or negative, what's important is the positive change--the shift towards healthier lifestyles, and thus the shift towards reduced health care costs.
12 comments:
The health care surcharge for smokers and the obese seems a good idea to eliminate unwanted and unhealthy behaviors on many employees. After all tobacco smokers consume about 25% more health care services than people who do not smoke. For years, workers with large employers have taken many health benefits for granted and have hardly noticed the price increases.
However, the new policies not only dent employees take home pay and benefits, but it can reduce freedom of employees to behave as they want outside of work. In addition, the new policies will affect the lower paid the hardest since health costs can eat up a bigger piece of their disposable income. Poor people tend to be less healthy and they may lack access to gym or fresh foods. There are people who no matter how much they exercise, they cannot lower their weight. Although, employers do provide alternative methods for workers who can’t meet the goals by asking for a doctor’s note saying that it is medically difficult or impossible. Overall, I think we should help people not penalize them for factors that can be beyond their control.
While the surcharge is an excellent way to incentivize quitting smoking or returning to a healthier weight, it may seem unfair given the difficulty of adjusting one's lifestyle, as Katherine pointed out. Some might consider it taking advantage of the inelasticity of demand, for coping with addiction or long-time habits can be incredibly difficult. That said, if coupled with better education and services to reduce such unwanted behaviors, maybe this is the right way to proceed.
Sin tax, anyone? This surcharge, a derivative in some way of the sin taxes enacted under the manifold environmental laws established in the 70's, is ambitious. However, before we criticize it for its inhibition of employee freedom, we must remember that as a private company, Walmart can do whatever tickles its fancy. Furthermore, charging more for smokers' health care is not only logical, but also serves to reduce the free rider effect of smokers who pay normal premiums yet require above-average treatment for their lifestyle choices.
I think that the story of Jerome Allan that Anna cited is a good example of how the surcharge can be a good incentive to not smoke. However, I feel that this is very unfair to the people who smoke for a living. I completely believe that smoking is bad, but once you are hooked, it is very hard to get off. As we learned in economics, the supply/demand graph for cigarettes is very inelastic, because smoking becomes a necessity once you are hooked. If these companies gave more support classes than just the 1 "no smoking class," than this surcharge would be more of a fair idea.
With the rising costs of health care, it makes sense that big corporations like Walmart would want to try and minimize the costs they spend on employee health care. I do agree that this would be a great incentive to get people to try and get into better shape, but at the same time, this is dramatically increasing the economic burden that families will have to face month to month. Overall, I feel that this has both good and bad qualities to it.
If worker's quit smoking, they can stop paying additional costs, so this program does punish for negative behavior in a way. It does not make sense that a smoker and a non-smoker pay the same rate for health care when it is scientifically proven that smokers will experience more health problems. I do not agree with Dustan. I feel that once the cost of smoking gets to a certain level, it would discourage potential smokers and would motivate more people to try quitting.
I think the surcharge is a bit unfair, as there are many people who are predisposed to having addictions or having high cholesterol. It's good that people are being given a reason to become healthier, although I doubt that companies like Walmart care about the health of their employees; I think they just want the money--I've heard (granted, from a Michael Moore movie) that Walmart takes out life insurance on their unhealthier workers so that the company makes money when the workers die. Also, I have heard that it works better to use the carrot than the stick to get people to improve their bad behaviors. It seems to me that it would be fairer if the money from the surcharge was used to reduce the cost of health care for nonsmokers, etc., but I recognize that America needs more money to pay for healthcare.
While the method of positive punishment enacted by Walmart may be intended for beneficial results, it's not the best way to incentivize smokers to quit their unhealthy habits. Perhaps the better method is to impose some sort of negative reinforcement - for example, companies can cut bonuses or other forms of excess stimuli for the workers in order to produce the same intended results without outright penalizing the workers who display unwarranted behaviors. In addition, I believe that Walmart (and other such companies) are being a little overambitious in their reach - perhaps they should focus solely on smokers for the time being and avoid tickling too many nerves.
Overall, I think that I would be in support of the health care surcharge for smokers and obese people. Yes, I do agree with Katherine in that it does seem unfair to people who can not control there weight no matter what, but I don't extend the same to smokers. My philosophy on that is that they shouldn't have started in the first place (although I do acknowledge that some kids who smoke grew up in a household where the parents smoke, but then my philosophy applies to the parents). If it helps them quit, then all the better for them. I don't say that out of solely selfish reasons because the main reason a smoker should quit is because it is much better for him to do so.
Back to the main point however, this seems like a good policy to me. It makes people who can control their unhealthy habits more responsible for their actions, as everyone should be in general. I also like the fact that the surcharge plan does include a way to help those who have medical conditions. It shows a general understanding instead of applying an overarching assumption that all people can control their condition. So all and all, it seems to be a pretty fair surcharge.
Although Wal-Mart may want to enact the surcharge for smokers for its own benefits, I think it's the only way to help smokers quit completely. I understand that it's hard to change peoples lifestyles, but like Patrick stated, it's they're fault they started in the first place. I believe this would have a positive impact on community and the peoples lives. Overall, it's a win-win for everyone. This health care surcharge is a MUST for a better lifestyle. Otherwise, what else would make these smokers stop smoking?
Lets be real... Wal-Mart is not raising health care costs because they are concerned about their worker's healthy lungs. Like Sabrina said, "[Wal-Mart is] a private company and it can do whatever tickles its fancy."
Economically, it's very wise to enforce this added surcharge...Generally speaking, Wal-Mart employees are on the lower end of the socio-economic scale, so they are generally more likely to smoke, be obese, and have high cholesterol. Wal-Mart is probably banking millions of dollars each month in savings by enforcing this added surcharge, and they disguised this plan by claiming to contribute to their employees in a "broader effort to help them quit."
I'm not saying Wal-Mart is evil (I mean who doesnt like ONE DOLLAR T-shirts?!), but don't forget their economic incentive in this deal...
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