insurance costs tied to health habits

[Kitergal]

SEATTLE TIMES

County workers' insurance costs to be tied to their health habits

By Kyung M. Song

June 8, 2005

 

Eileen Salas is 5 feet 1, weighs 208 pounds and suffers from slight arthritis. The 58-year-old microbiologist, a veteran of weight combat who wants to lose 50 pounds, recently re-enrolled at Jenny Craig and joined a gym.

"I'm tired of huffing and puffing when I go up the stairs. I'm tired of not being able to wear certain clothes," Salas said. Most important, "I'd like to have some more years ahead of me in good health."

Starting next year, Salas will get another compelling reason to tackle her obesity — it could cost her hundreds of extra dollars for health insurance.

Salas is one of 13,000 King County employees who will be asked to confidentially divulge whether they're overweight, smoke, speed while driving or engage in other health-related vices. Those who decline to answer, or choose not to reform, will pay higher deductibles and a bigger share of their medical bills.

The new program, named Healthy Incentives and based on an honor system, is designed to save money at a time of galloping health-care costs. And it's part of a nationwide movement by public and private employers to use money — either by giving it or taking it away — to entice workers into healthier lifestyles.

But experts say few rigorous studies exist to show whether such incentives or penalties lead to significant savings. And worker-rights advocates say the practice raises serious questions about privacy and fairness.

King County Executive Ron Sims counters that employers who pay the bills have the right to demand some cooperation.

"You have to create a reason for people to feel motivated" to get healthier, Sims said. Right now, "we have no ability to influence behavior."

To do that, King County will ask workers next year to fill out health-risk surveys with height, weight, exercise levels, dietary habits and other information. The assessment is voluntary, but not if the employee wants to avoid the highest out-of-pocket costs.

Personal plan

To maintain their current benefit levels, employees and their spouses or partners, but not their children, will have to follow a personal plan to improve their health. For a smoker, for instance, that might mean enrolling in a cessation class, or getting a nicotine replacement.

Then when Healthy Incentives coverage starts in 2007, each family will have points to rank them in one of three levels: bronze, silver or gold.

The health survey works on an honor system; workers won't get weighed or have their cholesterol levels checked. And the county won't see employees' individual survey answers. The company that handles the surveys will only report whether the employee and family is gold, silver or bronze. "The county won't have any way of knowing if employees are lying," said Caroline Whalen, King County's deputy administrative officer. "But it's in their best interest to be honest."

The final benefit details are still being worked out, said Kerry Schaefer, the county's compensation-and-benefits manager. But the cost difference between bronze and gold levels likely will be substantial. A bronze-level family — which opts out of the survey — may have to pay the first $1,500 of their annual medical costs, and 20 percent of their subsequent bills. A gold-level family — one that fully participates — might only pay $300 in deductibles and a 10 percent co-pay, Schaefer said.

Scoring is based on the adult family member who scores lowest, so if a worker's spouse declines the survey, the whole family will be in the bronze level, even if the employee fully participates.

Sims said the county, which is self-insured, no longer can afford carte blanche health care. Last year, 39,000 employees and dependents racked up $136.7 million in claims. That was up 57 percent from 2000, while cost-of-living raises for workers rose only 14 percent. Without changes, total health-care costs were projected to climb to $205 million by 2009, more than doubling in less than a decade.

Healthy Incentives is the centerpiece of a strategy to shave $40 million from the county's benefits spending between 2007 and 2009. The effort also includes providing a 24-hour nurse hotline and helping workers with diabetes and other chronic conditions to better manage their health, among other things.

King County officials expect 30 percent of employees and their partners to opt out of the health-risk survey, putting them in the bronze level. Ten percent are expected to earn the silver level — taking the survey but not following the personal action plan — and 60 percent are expected to reach the gold level.

So the county is hoping to save an estimated $18.5 million by 2009 by having fewer claims from healthier employees, and by collecting more money from those who won't participate.

In 2004, chronic conditions such as heart disease, obesity and emphysema made up some of the county workers' most common medical claims. But catastrophic events, such as premature babies and aneurysms, accounted for some of the biggest spending.

Other employers' incentives

King County is joining a relatively small but growing list of employers who are opting for the tough-love approach.

To cut back on expensive premature births, the meat-packing company E.A. Miller, a subsidiary of the Colorado beef processor Swift & Co., requires expectant mothers to attend two prenatal classes to receive insurance coverage. In Georgia, state workers who smoke pay $40 in extra monthly premiums.

Other companies go even further. Union Pacific railroad has been declining to hire smokers in some states, including Washington, eliminating 22 percent of job applicants.

Impact questioned

Still, little research has measured whether such incentives or penalties produce differences in health-care costs, said Meredith Rosenthal, assistant professor of health economics and policy at Harvard's School of Public Health. Wellness programs tend to attract motivated workers who may already be fit. And it could take years for any savings to materialize from such efforts as controlling blood pressure or lowering bad cholesterol levels, Rosenthal said.

King County's efforts "may be a good thing for public health, but not all employers will see the payoff in the short term," Rosenthal said.

Even so, unions for county workers say they support rewarding personal responsibility. Dustin Frederick, business manager for the Service Employees International Union Local 519, contends that Healthy Incentives is a more democratic health plan.

"If you are unhealthy and you don't want to make any effort whatsoever, you still get the same benefits, but you have to pay more," said Frederick, whose union represents 911 dispatchers, jail employees and others.

King County workers currently pay no monthly premiums for health insurance and that will not change. Frederick said his union supports anything that would keep insurance affordable.

Kam Man, an office technician at county-owned Boeing Field, said she's OK with King County applying a little pressure on workers.

"It's unfair that people smoke, drink and eat, and end up in the hospital and they use up all the insurance," said Man, who has worked for the county for 25 years. "Everyone should be responsible for their health. Not just for the medical insurance, but for your own good."

Sims stresses that the county will reward effort, not results. So smokers who can't quit, or dieters who can't shed weight, will still earn points if they keep trying.

"Folks, relax. We're not in the punishment business," said Sims, who admits to a weakness for peanut butter and jelly and says his weight is not as low as his doctor would like it to be.

But Lewis Maltby, founder of the National Workrights Institute of Princeton, N.J., a workplace human-rights group, argued that socking smokers with higher fees, for example, is inequitable unless companies can show an actual financial basis for it.

"A surcharge is only fair if it represents actual cost to the employer," said Maltby. Trouble is that most employers "pull a figure out of thin air."

Maltby also disputed the county's assertions that workers can choose not to disclose their health status.

"A voluntary program with a penalty attached isn't really voluntary," Maltby said. "Asking people about their private behavior, unrelated to their jobs, because of health-care costs is a practice that could easily become intrusive."

Salas, the microbiologist who works for Public Health — Seattle & King County, worries that she and others like her may end up getting penalized despite their best efforts. Salas says she doesn't need her employer to be reminded that she has to shape up. People's health struggles ought to remain private matters, she said.

"So many people that are obese have been that way for a long time," Salas said. "It worries me that they might be able to legislate what you do."

[thelawgoddess]

wtf? next they'll be asking for a dna sample ...

[Kitergal]

I dunno...I kinda like the idea! I know my insurance rates have done nothing but go up, and I'm never in the doctors office! I'm kinda tired of paying for everyone else's sickness.....but..I don't work for K.C. wish I did tho!

[barjor]

I just finished up my life insurance paper work. *puke*

The question is ,will admiting to climbing make it cheaper or more expensive for you to get health/life insurance?

[thelawgoddess]

*puke*

[Alasdair]

Sounds good to me. Obviously it will need some sort of oversite so they dont overstep their bounds, but I am tired of paying the same high rate for health insurance for the fat fuck smoker who drinks a 120 oz of soda a day. Of course they are going to have more health problems than someone who has a healthy lifestyle and the person with a heathy lifestyle has to pay their medical bills. I am all for it.