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August 25, 2019

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Bigger premium discounts seen as a reward — and a problem

Ensign proposes amendment to encourage good habits by cutting insurance costs for those with healthy lifestyles

John Ensign

John Ensign

If you smoke, should your boss charge you more for health insurance?

What if you have high cholesterol? Or are fat?

Republican Sen. John Ensign believes workers who are living healthy lifestyles should be rewarded for their good behavior — and those who are not should pay.

Ensign has introduced amendments to the health care reform bill making its way through Congress that would allow employers to offer workers deep discounts — up to 50 percent — on insurance if employees stay trim, quit smoking or otherwise lead healthy lives.

The reasoning behind the proposal: Why should healthy workers pay the same price for insurance when their unhealthy colleagues will presumably need more health care and drive up the cost?

But a large coalition, including the American Cancer Society, public health groups and unions, disagree with that approach. Ensign’s proposal and others like it before the Senate Finance Committee, they say, would hurt the people they are trying to help and leave taxpayers to foot the bill.

In a letter last week to the Senate committee, the coalition’s more than 30 groups urged senators to oppose the Ensign amendment, saying it “could lead to discriminatory practices and make health coverage unaffordable for those who need it the most.”

This ideological battle is an undercurrent in the health care debate, particularly among those hoping to inject a dose of personal responsibility into health care decisions.

Ensign has become an outspoken advocate of healthy living. He takes an almost daily afternoon run along the National Mall and is an avid bicyclist when he is at home in Las Vegas.

Earlier this year his office held a weight loss contest — offering a $50 reward to the winning staff member (and fining those who dipped into the office candy bowl). He lost five pounds.

“It is ludicrous though to believe that having people quit smoking and rewarding them for proper weight management wouldn’t save money,” Ensign said this summer in a speech on the Senate floor.

Ensign cites a wellness program the Safeway grocery store chain implemented among the nonunion part of its workforce. The company has said it was able to cut insurance costs by rewarding healthy behavior with lower insurance premiums.

Under current regulations, adopted in 2006, employers may reduce employee premiums by up to 20 percent if workers reach certain health milestones — lose a specified amount of weight, quit smoking or lower their cholesterol, for example.

Businesses have increasingly used the regulation, hoping such incentives will create a culture of healthy living in the workplace and bring overall insurance costs down.

Health care premiums have been rising nationwide, and total costs have jumped 82 percent in Nevada over the past decade, according to Families USA, a national health care advocacy group. According to the National Business Group on Health, each smoker drives up employers’ health care costs by more than $1,600 and obesity accounts for 27 percent of rising health care costs in the workplace.

Businesses are seeking any method to reduce rising health care costs and see Ensign’s proposal to significantly expand incentives as a possible solution. America’s Health Insurance Plans, the leading lobby for the nation’s insurance companies, supports it, as does the U.S. Chamber of Commerce.

However, the groups opposing the Ensign amendments, and other lawmakers on both sides of the political aisle, believe the current discounts of 20 percent are adequate.

Anything more, they say, could hurt a key objective of health care reform — increasing the number of Americans with insurance coverage.

Under the congressional health reform proposals, insurance companies would no longer be able to deny coverage based on preexisting conditions. All Americans would also be required to have insurance, with subsidies for those who cannot afford policies and exemptions for those for whom the costs consume more than 11 or 12 percent of their income.

The opponents say allowing up to 50 percent off of premiums for healthy behavior may make buying insurance too expensive for unhealthy workers who could benefit from workplace wellness programs. They also say the higher costs would shift more of the financial burden to the government subsidies.

“We think it’s counterproductive,” said Stephan Finan, senior director for policy at the American Cancer Society Cancer Action Network.

Most smokers, he explained, pick up the habit in their teens, at a time when they are not making informed choices. Most are unable to quit smoking the first time they try.

“We don’t want them to stay away,” he said.

Finan adds there is also a “big brother aspect” to employers keeping tabs on workers’ behavior. “How does the insurance company know you smoke?”

In Nevada, nearly one in four adults smoke.

Ensign assures his amendments would not punish those with unhealthy lifestyles, but simply make the discounted rates available for those who take care of themselves.

He is offering two amendments in the Senate Finance Committee, which has spent the past week debating the health reform legislation. One amendment would boost the discount to 30 percent and another would raise it to 50 percent. Even if the amendments are defeated in committee, Ensign says, he plans to take the 50 percent amendment to the Senate floor for a vote.

Critics note that the business of insurance is about spreading the risk. If one person is receiving a discount, another is paying more.

Kathleen Stoll, deputy executive director of Families USA said when the discounts aren’t available to all, they become punitive — for example, to low-income people or single parents who might not have time to hit the gym after work.

Many of the groups that signed on to the opposition letter are not opposed to programs within the workplace that give rewards for wellness. Nothing wrong, they say, with a gift card for workers who join the smoking cessation programs or a weight-loss group.

“Sure the low-income mom may not get a free iPod, but she won’t have to pay more,” Stoll said. “To the person who’s paying the higher price, it feels like a penalty.”

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