Cutting the Price of Insurance

by admin on July 17, 2009

How is the government really going to regulate such a thing? Who will pay for the cost for the doctors to do the testing and checking to make sure people really have stopped smoking?

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Workers who quit smoking, lose weight, and eat right could have their health insurance premiums cut by as much as half, possibly saving them thousands of dollars per year, under a measure inserted with little notice this week into the Senate healthcare overhaul bill.

The move represents a potential breakthrough on one of the most controversial elements of healthcare overhaul: how to get Americans to improve their well-being without turning government into a medical version of Big Brother.

Under the plan, individuals would have a strong financial incentive for jumping on a treadmill or signing up for smoking cessation classes, moves that would not only prolong their lives but also reduce the financial burdens of behavior-related disease on the healthcare system.

“Money talks,’’ Senator Judd Gregg, the New Hampshire Republican who helped broker the deal reached Monday night, said in an interview. “People react to incentives that involve cash.’’

The supermarket chain Safeway and some other companies – including, in Massachusetts, EMC Corp. – have developed these programs on their own. But such plans have not become widespread nationally.

The bipartisan agreement by members of the Senate health committee could still unravel as the bill makes it way through other committees in the Senate and House. But after months of focus on how to provide coverage to the uninsured, it represents a stark acknowledgment by senators that overhauling the nation’s healthcare system must include measures to make Americans more health-conscious.

Previous measures aimed at convincing Americans to get in shape and lead healthier lifestyles have had mixed success. While the smoking rate has dropped dramatically in recent decades, the obesity rate has doubled since 1987, according to Ken Thorpe, a professor of health policy at Emory University. If the country could return obesity levels to the 1987 rate, it could save $225 billion per year, going a long way to paying for other measures in the healthcare bill, Thorpe said.

“To date, the Congress just has not dealt with this,’’ said Thorpe, who was a senior health policy aide during the Clinton administration.

Under existing federal law, companies that offer group health insurance can offer a maximum 20 percent discount to employees who can show they have taken steps to improve their health. The new measure would raise that discount to 30 percent and enable the Obama administration to raise it to 50 percent.

The measure could have the most impact at larger companies that are self-insured or provide insurance through a private company, and would likely have less impact at small businesses or those with limited health plans, analysts said.

EMC, the Massachusetts-based data storage company, gives a 12 percent discount, amounting to $300 on an annual family plan, to employees who take a health risk assessment. Sessions with a “lifestyle coach’’ to improve health are available on a voluntary basis. EMC says it does not require employees to prove that they have accomplished health goals. Instead, it focuses on an educational approach that it believes will pay off in the long term.

“It is about driving partnership, not strong-arming anyone to do anything,’’ said EMC benefits director Delia Vetter. About 90 percent of the company’s US workers participate.

A stricter incentive program is run by Safeway Inc., the grocery chain. It gives discounts to those of its 30,000 nonunion employees who demonstrate they already meet certain health measures, or show they have quit smoking, lost weight, or taken other steps to get healthier, according to the company’s vice president for health initiatives, Ken Shachmut. About 74 percent of the eligible workers participate. Under a family plan, the savings can be as much as $1,560 per year, according to Safeway.

If the Senate provision passes and the company could raise the discounts to 50 percent, families would save more than $3,000 a year, Shachmut said.

The company said its plan enabled it to cut nonunion healthcare costs by 13 percent in 2006, when the program took effect, and has kept costs relatively flat since then. A union version of the program is in the works.

Safeway’s program has been widely hailed. In May, President Obama praised “companies like Safeway that have been able to hold their costs flat for their employees at a time when other companies are seeing double-digit inflation in their healthcare.’’ Obama cited benefits to employees “as a consequence of them stopping smoking or losing weight or getting exercise.’’

Senate Republicans recently said the legislation initially written by Democrats on the health committee could have eliminated the ability to provide the 20 percent discounts for healthy behavior. “The bill that Democrats are now pushing through the Senate would actually ban this successful program from being copied and implemented by other companies,’’ Senate Republican Leader Mitch McConnell of Kentucky said recently.

On Monday, the Globe asked a spokesman for Senator Christopher Dodd of Connecticut, who is handling the issue for Democrats, whether McConnell was correct in saying the legislation would ban the program. Several hours later, in what Dodd’s office said was a coincidence, senators announced they had reached an agreement that allowed the discounts and expanded them to as much as 50 percent.

Democrats said they were never trying to ban the discounts, but wanted to make sure that individuals who had certain kinds of health problems were not discriminated against. As a result, the revised legislation says that the wellness programs cannot be “overly burdensome’’ or be “a subterfuge for discriminating’’ based on a person’s health.

Dodd said yesterday that the legislation would give employers “greater flexibility to provide their employees with premium discounts for participating in wellness programs. It will help Americans become healthier, avoid illness, and reduce healthcare costs to individuals, businesses, and the government.’’

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In California on the Individual side of Health Insurance people will get rate increases for being overweight, smoking and other Health issues caused by being over weight. What can happen is you can go through underwriting after you quit smoking for more then 12 months or lose weight.

With the government plans, all Americans will get Health Insurance already so how will one get a rate increase?

Source: www.boston.com

Questions Please Call Politi Insurance Agents & Brokers

818-709-8442

www.health-insurancecalifornia.com

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