Unfortunately, a slew of nutrition activists and nanny-statists want to use the fact some Americans are getting bigger to limit what the rest of us can eat. So we’re seeing lawsuits against food companies, calls for “fat taxes” on calorie-dense eatables, and moves to restrict advertising and marketing of junk food.
We oppose these measures, and prefer that people be free to make their own decisions about diet and lifestyle and also bear the consequences of those decisions.
But there are things we can do about health insurance that could increase personal responsibility and harness the free-market power to encourage good decisions on diet and activity.
There are legal barriers against health insurers assigning risk in premiums as is done with auto and life insurance premiums. Many states require that health insurers charge the same premiums for any member of a group health plan, regardless of risk. This means the costs of the donuts-and-pizza couch potato’s unhealthy decisions are imposed on the gym rat who diets carefully and watches his cholesterol.
Removing these barriers would encourage health insurers to begin experimenting with carrot-and-stick approaches to healthy lifestyles. One company might give premium discounts for gym memberships, for example. Another might foot the bill for nutritional counseling. In short, health insurers would compete with each other to contrive a system that best balances the consumer health and self-interest.
As I have previously espoused this position, I love this thinking. If we link obesity and sloth to insurance costs, we would get everyone’s attention. And afterall, we should focus on increasing personal responsibility. I do not want to subsidize the slovenly. And I should not.
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5 Responses to An interesting free market perspective on obesity
Anona Mouse
October 21st, 2004 at 3:09 pm
Please tell me how you intend to distinguish between these people:
1. The slovenly, small-framed person with a high basal metabolic rate. (It is quite possible to be “normal” weight and have metabolic syndrome.)
2. The heavy and large-framed person who exercises and eats well.
3. The person who has an inborn abnormal drive to eat. These folks are rare but do exist.
4. The person whose ancestors were evolutionarily adapted to famine and therefore store fat like it’s going out of style. (Notably certain African subraces.)
5. The person who exercises and has a “normal” body fat percentage, but chooses very unnutritious foods.
6. The Standard American Couch Potato.
7. The poor overworked bastard who is slowly committing suicide-by-swivel-chair to provide essential services to you.
Objectively measuring health is not straightforward, and that poor health might be correlated with moral failure would not justify blanket punishment.
Anona Mouse
October 21st, 2004 at 3:29 pm
Oh, and what about the economics?
On the credit side: Higher premiums will be an incentive to move some fraction of the target demographic to better health.
On the debit side: Some fraction will remain unhealthy. Many (most?) will (1) lose coverage and become less healthy, thus depriving society of their labor, and/or (2) maintain health using “free” emergency medicine, which is a huge cost to society.
Given that obesity and poor health themselves are not sufficiently strong incentives to become healthier, why do you think higher premiums are uniquely superior as an incentive?
Bernie Simon
October 21st, 2004 at 6:37 pm
The big cost to insurance companies comes from patients with cronic illneses that require constant care. It’s these patients that will catch it in the neck from your proposed reform, not your slovenly lardbucket.
swift
October 22nd, 2004 at 8:58 pm
Did you hear this?
Starting next spring, Blue Cross/Blue Shield of North Carolina will offer some of the most extensive coverage for obesity treatment in the nation. The insurer is betting that the cost of helping people slim down will be lower than that of treating obesity-related diseases. NPR’s Patricia Neighmond reports.
http://www.npr.org/rundowns/segment.php?wfId=4120015
Aaron
October 26th, 2004 at 7:25 pm
One is loathe to think that an insurance company could not have charged a higher premium to Jim Fixx, the overweight couch potato, than it could have charged to Jim Fixx, fitness guru, who dropped dead of a heart attack at the peak of his physical fitness….
C’mon. The primary reason for breaking groups into subgroups, for insurance companies, is to extort a higher overall premium. Where is there *any* evidence that the cost of health insurance inspires healthier consumer lifestyle?