Many Americans Back Higher Costs For People With Unhealthy Lifestyles

Wall Street Journal ^ | July 19, 2006 | WSJ ONLINE/HARRIS INTERACTIVE HEALTH-CARE POLL

[Mr. Brightside]

If an individual wishes to smoke, remain obese or otherwise intentionally increase his or her risk to the insurance company of a pay out, then it is logical for that individual to pay an appropriately higher premium

... OR, accept a lower benefit.

The bottom line is this, if you want someone else to pay for your hospital bills, they should have the right to ask you a lot of questions and rate you accordingly.

[Sir Gawain]

All you people that applaud seat belt and helmet laws, hope you enjoy the full implementation of nanny state society.

[bfree]

Just tired of windbags, like you, pontificating about others. It is a free society, which you apparently do not believe in.

[Gabz]

Equating illegal behavior with legal behavior is mixing appleas and oranges.

BTW, our health insurance offers discounts on premiums for non-smokers, those without weight related issues, and regular well visits. We get 2 of the 3 discounts.

[thinkthenpost]

You completely rejected the half of my post stating the same high risk or at risk folks die earlier thereby relieving the system of supporting them during the really expensive later years.
By the way a 30 year old doesn't die of smoke caused lung cancer very often. Perhaps a 52 year old who had been smoking for 30-35 years would be a more common occurrence. even with expensive cancer treatments I posit the 52 year old or 30 y.o. cost less than the 89 year old who's been in a primary care facility for two years straight and a nursing home for 7 years before that. I don't know why that is so offhandedly dismissed?
Finally, a 30 year old smoker is going to have a MUCH longer life expectancy than a 50 year old nonsmoker who should pay the higher premium?

[Mr. Brightside]

In a free society, heath insurers would be able to rate people with high risk behaviors with higher rates.

If you were asking ME to pay for your health insurance, I should be free to ask you all sorts of question and rate you accordingly. Only in a socialist nation would that be prohibited.

[george wythe]

I did my part to get into shape. I went into the Atkins diet a few years ago, and I kept the weight off. I learned to read labels to avoid sugar under its many names in packaged food, and joined a gym (about 3 hours a week). This small change of lifestyle made a huge difference.

Nevertheless, most fat people keep on eating packaged food loaded with sugar and artificial chemicals, and they wonder why they are fat.

Btw, being fat is itself enough punishment. I don't mind sharing the insurance costs with fat people.

[Mr. Brightside]

our health insurance offers discounts on premiums for non-smokers, those without weight related issues, and regular well visits. We get 2 of the 3 discounts.

You will begin to see more of that. But the problem is that most of the health insurance is paid by employers or the government.

The only way to get the end users to change behavior is to make THEM pay more, not just their employers.

[bfree]

I will assume you are so edgy because you are either on the Atkins Diet or trying to quit smoking.

With your accusations based on nothing, I'll bet you were a big fan of Germany in the 1930's. Obviously, you feel part of a "master race". You really are pathetic.

[tortoise]

This is the balance problem of insurance. At one extreme, you pay for whatever happens to you, at the other extreme your costs are averaged with everyone else no matter what risks you take. If insurance gets too close to the former there is little point to it, but if it gets too close to the latter then there are no consequences for poor judgement.

It is worth pointing out that most insurance categorizes people into broad risk groups e.g. auto insurance. For better or worse, some risk factors are legally allowed to be considered while others are not. This regulation has the effect of forcing some risk spreading onto the insurance company, but it also causes the insurance companies to use legal proxy metrics that catch individuals who are not a risk. For example, ethnicity is not allowed to be a risk factor for auto insurance even though there are significant statistical differences, so the insurance companies use residency neighborhood demographics to infer ethnicity and adjust risk accordingly regardless of actual ethnicity.

That said, I've known a few people that actually worked on the actuarial software for insurance companies in Canada and the US, and supposedly some technically illegal metrics do get factored in on the sly at some companies to make them more price competitive in some market segments.

[Mr. Brightside]

Just trying to give you the benefit of the doubt.

I guess you have no excuses now.

[Lucky Dog]

You completely rejected the half of my post stating the same high risk or at risk folks die earlier thereby relieving the system of supporting them during the really expensive later years.

Not true. I was (am) trying to bring the discussion to a risk/cost versus premium basis.

In theory, a healthy 30 year-old will pay premiums for many years before significantly drawing any benefits. During this time the insurance company invests his or her money and earns a great deal. If the individual dies early, the insurance company collects less money in terms of premiums and potential investment earnings. Consequently, even if the payout at a later date is higher than it would be for an earlier illness and/or death, the benefit is definitely there in terms of risk and pay back for the insurance company.

A 50 year-old pays a premium for a much shorter time (allowing much less time for the insurance company to use it for earning purposes) before drawing benefits. Consequently, the premium must be much higher because the risk versus pay back to the company is much higher.

In a similar type of consideration, those individuals of any age who voluntarily raise their risk to the insurance company have a much higher risk versus pay back to the company. Consequently, the logical path, financially, is charge these individuals a higher premium. If these higher risk individuals choose to reduce the risk to the insurance company by voluntarily changing their risk factors such as smoking and obesity, then they should be rewarded with reduced premiums.

[bfree]

Excuses for what dimwit?

[thinkthenpost]

Here at El Paso County, Employee only is mostly the county, Employee spouse or Employee children is about half half, Employee family is greatly payed by the employee.

I've been reading your posts and it seems to me you either have a phenomenal plan where you guys pay very little, or you're forgetting copays and the 20-30% that the employee/ patient has to pay in most insurance plans. I admit that medical care is screwed up, but the shrill screams you keep repeating and most of what you advocate will move more folks off of the insured rolls and will just give the socialized medicine folks more ammo. I unfortunately don't see any way to stop that eventuality and that makes me worry about the quality of healthcare that will be provided under such a system.

[Dead Corpse]

Socialism is driving up health care costs, so more socialism is the answer?

These people don't even stop to think about what they are saying any more do they...

[Mr. Brightside]

I am in the health club business and make my living off of people who have been making very poor lifestyle choices.

One woman quit working out and dropped the nutrition plan when we tried to cut her down from ONE two liter of pop per day from TWO. (and this was not diet pop)

She later got gastric bypass surgery, paid for by her employer's health insurance company.

I can guarantee you that if SHE had to pay for the surgery, she probably could have stopped drinking so much Coke.

On the flip side, over the last 4 years we have helped eight people lose over 100 pounds. They did it by determination and self-discipline.

If they had free access to gastric bypass surgery, you and I probably would have paid for it in higher taxes or insurance rates.

[tortoise]

You completely rejected the half of my post stating the same high risk or at risk folks die earlier thereby relieving the system of supporting them during the really expensive later years.

Not really arguing with your post per se, but your math is incorrect. People that die early incur most of their life's medical expenses early, which is much more expensive financially to the insurance company than people that push their expenses out a few decades. Remember, insurance is a financial instrument both for you and the insurance company, and the benefit pool grows exponentially with time. Medical expenses a few decades out are significantly discounted compared to medical expenses now.

To put it another way, a difference of twenty years in an incurred medical expense gives the insurance company (before expenses) approximately ten times(!) the benefit money to work with independent of premiums paid over that same period. The "break even" benefit money available grows exponentially, so people who get sick and die later greatly reduce their net impact on the insurance money pool because in most cases their premiums have compounded to value that far exceeds their medical expenses.

The medical insurance company does not break even on your life until you've lived several decades, with the specific benefit/premium structure determining where that break even point is on average. The premiums need time to compound.

[Mr. Brightside]

high risk or at risk folks die earlier thereby relieving the system of supporting them during the really expensive later years.

If this was true, insurance companies would give DISCOUNTS for smoking and obesity.

There is NO evidence to support your claim that obesity and smoking lowers the nation's health care costs.

[tacticalogic]

I am in the health club business and make my living off of people who have been making very poor lifestyle choices.

So this would be means of coercing people to seek the services you offer.

[Mr. Brightside]

If people took my advice, it could put me out of business.

If the country quit smoking, who would need a "stop smoking" counselor?