Scaling healthcare costs to the risk-profile of your lifestyle.

My company just instituted a thing where if you use tobacco products, you have to pay an extra $50/month on your health insurance.

It doesn't affect me as (a) I don't smoke, and (b) as a union-represented employee, I'm exempt from it anyway, but it's interesting.

As someone who lives a fairly healthy lifestyle, but has some medical issues looming in the future (I'm due a heart valve replacement sometime in the next 3-30 years, and the wife has a couple of chronic degenerative medical issues that will become more and more serious as she ages), I'm intrigued by the notion of scaling healthcare insurance costs based on the risk-profile of your lifestyle, but appalled at the notion of scaling them based on the risk-profile of your genetics.

We have the smoking fee thing too but only at $20/month.

I'm against it. I believe (and am far too lazy to look it up) that even though higher-risk profiles cost more in the short run, they tend to not live as long. So the eat-healthy, live long, die anyway types will actually end up costing just as much (if not more) by the time the final bills are totaled.

My company adds a small premium on to life insurance for smoking.

Given that I am more likely to die from colon cancer genetically than my smoking... I think this is pretty dumb.

Edit: What about heavy drinking? What about eating fast food for every meal? Drug usage? Oh that's right... we only think smoking is truly evil enough to warrant this kind of crap.... all while smokers continue to pay big taxes to the government.

Nevin73 wrote:
I'm against it. I believe (and am far too lazy to look it up) that even though higher-risk profiles cost more in the short run, they tend to not live as long. So the eat-healthy, live long, die anyway types will actually end up costing just as much (if not more) by the time the final bills are totaled.

My company adds a small premium on to life insurance for smoking.

Well sure, but without looking anything up, I can just as easily claim that the high-risk profiles tend to result in chronic conditions, which, by definition, cost more to treat as they are ongoing conditions, whereas the low-risk profiles tend to die of acute conditions, which, by definition, are sudden-onset fatalities, and cost very little in terms of healthcare.

TL:DR version. The healthcare cost of 5 years of emphysema followed by a heart-attack far far outstrip the cost of 20 years of no major conditions followed by the same heart-attack.

Demosthenes wrote:

Edit: What about heavy drinking? What about eating fast food for every meal? Drug usage? Oh that's right... we only think smoking is truly evil enough to warrant this kind of crap.... all while smokers continue to pay big taxes to the government.

Indeed. Or what about the fact that I ride a bike and snowboard, both of which have risks of injury and/or disablement.

Jonman wrote:
Nevin73 wrote:
I'm against it. I believe (and am far too lazy to look it up) that even though higher-risk profiles cost more in the short run, they tend to not live as long. So the eat-healthy, live long, die anyway types will actually end up costing just as much (if not more) by the time the final bills are totaled.

My company adds a small premium on to life insurance for smoking.

Well sure, but without looking anything up, I can just as easily claim that the high-risk profiles tend to result in chronic conditions, which, by definition, cost more to treat as they are ongoing conditions, whereas the low-risk profiles tend to die of acute conditions, which, by definition, are sudden-onset fatalities, and cost very little in terms of healthcare.

TL:DR version. The healthcare cost of 5 years of emphysema followed by a heart-attack far far outstrip the cost of 20 years of no major conditions followed by the same heart-attack.

Also, long term chronic conditions have a very strong tendancy to affect one's productivity during years when the insured should be contributing to the risk pool. In sharp contrast, the folks that live healthy tend to contribute far longer and, thus, amortize their health care costs over a much longer financial picture.

TL:DR version. If a smoker dies at 50 after 5 years of emphysema, he has cost the health care pool a ton of cash for which he only contributed to for 20 some years. If a marathon runner dies at 75 of sudden cardiac attack, he has cost far less AND he has contributed to the risk pool for nearly twice as long.

Except how many people past the ages of 50 or 60 actually live without some sort of chronic ailment?

Nevin73 wrote:
Except how many people past the ages of 50 or 60 actually live without some sort of chronic ailment?

There are HUGE differences in the cost of treatment of different severities of ailments though. Even diabetes (very common among the over 50 crowd) is VASTLY different when someone is living a lifestyle in which one's sugar is under control and when they are not.

Healthy lifestyles are just about never negatively cost impacting on the overall risk pool.

Nevin73 wrote:
Except how many people past the ages of 50 or 60 actually live without some sort of chronic ailment?

Well that's just it, isn't it. The higher-risk demographic will contain fewer people like that, and they will have on average more chronic ailments.

Nevin73 wrote:
Except how many people past the ages of 50 or 60 actually live without some sort of chronic ailment?

How many people have an objectively healthy lifestyle?

clover wrote:
Nevin73 wrote:
Except how many people past the ages of 50 or 60 actually live without some sort of chronic ailment?

How many people have an objectively healthy lifestyle?

It is actually very easy to determine what is and is not a healthy lifestyle. It just requires the willingness to identify and weight risk factors. Insurance companies do so all the time.

Demosthenes wrote:

Given that I am more likely to die from colon cancer genetically than my smoking... I think this is pretty dumb.

According to the CDC, there are about 440,000 smoking-related deaths in the US each year. About 250,000 of them are males who were not primarily exposed to second-hand smoke (that is, they were smokers/chewers). According to Cancer.org, there are about 50,000 deaths due to colon cancer each year.

You're about 5 times more likely to die of smoking than of colorectal cancer, all other things being equal. If you have a genetic problem that makes you, say, 10x more likely to die of colorectal cancer than the average person, that doesn't make cigarette smoking any safer than it would be for the average person, nor does it negate a policy that spreads costs based on *average* risks (rather than special ones).

If you were actually charged on risks, and you pay $20 extra for smoking, you should probably pay about $100 extra for the colorectal gene... If we went by individual risks, that is. It's not a good way to go. We're all better off if we stick to large population statistics, because that's how insurance works best. (It also works best when we all pay in, rather than exempting some individuals, for obvious reasons.)

My employer does the same thing, but in a more subtle way -- by manipulating deductibles. If you undergo screening, score well on the wellness metrics (smoking, BMI, cholesterol, blood sugar and lipids etc), sign up for wellness coaching and exhibit healthy lifestyle, you get additional dollars into your Medical Reimbursement Account. If/when you actually use the services, said dollars are used towards co-pay and deductibles. Thus, even though the pay period withholdings may be the same, a smoking joe will end paying MORE at actual the point of service.

I'm not sure about our health care policy as I'm covered under Kepheus's plan through his employer - I assume it probably costs us/him a bit more as he's got a chronic condition (colitis).

I know that my life insurance policy costs me less per month than it might do otherwise because I don't smoke or have a high-risk lifestyle (i.e. not into sporty things like skydiving, and swimming with sharks or whatever).

My parents used to pay less, they now pay more as they've taken up smoking again. For me at least, it seems reasonable that I'd pay extra if I take up a habit that's going to make me need care that I wouldn't have needed if I hadn't.

There are a number of family doctors in Ottawa who, if you smoke and refuse to quit, will drop you as their patient.

I don't know if an extra $50 a month is enough of a deterrent. Smokers already putting a pretty serious amount of cash towards their habit. $50 a month is a pretty steep increase on a pack-a-day habit, but it's not enormous, especially if you live in New York. If the cost of cigarettes on their own isn't enough to make you rethink your habit, I'm not sure a higher insurance premium is going to do anything either.

http://www.theawl.com/2013/07/what-a...

kazooka wrote:
I don't know if an extra $50 a month is enough of a deterrent. Smokers already putting a pretty serious amount of cash towards their habit. $50 a month is a pretty steep increase on a pack-a-day habit, but it's not enormous, especially if you live in New York. If the cost of cigarettes on their own isn't enough to make you rethink your habit, I'm not sure a higher insurance premium is going to do anything either.

http://www.theawl.com/2013/07/what-a...

I think state governments and insurance companies know that, too. The premium for insurance companies is meant to offset the estimated increased healthcare costs, while stage governments just view smokers as free revenue. No one complains about cigarette taxes.

At least insurance companies offer (often free) access to cessation techniques and products.

Demosthenes wrote:
Given that I am more likely to die from colon cancer genetically than my smoking... I think this is pretty dumb.

Edit: What about heavy drinking? What about eating fast food for every meal? Drug usage? Oh that's right... we only think smoking is truly evil enough to warrant this kind of crap.... all while smokers continue to pay big taxes to the government.

I'd like to introduce you to someone:

IMAGE(http://blogs.laweekly.com/informer/michael_bloomberg.jpg)

One of the larger companies here (Denmark), has decided to charge people vacation time for taking smoking breaks. Not sure how they are going to actually enforce this, and it does not include the breaks you are allowed to take for say coffee/water/bathroom, but I think it is a slippery slope to go down.

Find me someone that takes zero risks with their health and I'm down. Otherwise it's healthcare, it's supposed to be there for you when you need it. It's one of the reasons we decided civilization was a good idea.

However, since something like smoking is a massive public health burden that seems like an unfair cost that society has to bear in order for tobacco producers to profit so it seems fair to defray that cost through taxation.

A friend of mine is an action junkie. He's an avid surfer, mountain biker, and skier. He's been through two knee surgeries that I'm sure have cost more than the accumulated healthcare costs of my high blood pressure and type 2 diabetes (medication and diet managed). Now, in the long run, it will depend on how long I stick around to see which of us ends up costing society more.

All of this said, the idea of differential costs per insured is very much a red herring. The fact of the matter is that health care costs in the US are so completely out of whack with just about any other habitted portion of the planet not because of smoking, obesity, HFCS, or moonspot activity. It is primarily because it is a market of inelastic demand and zero purchaser bargaining power. Even if every single American was within the USDA suggested BMI standards, never smoked, never drank, and all had perfect genetics, we would STILL be twice as expensive to insure as the next nearest competitor.

Our system is broken. It isn't the patients.

Even if every single American was within the USDA suggested BMI standards, never smoked, never drank, and all had perfect genetics, we would STILL be twice as expensive to insure as the next nearest competitor.

Our system is broken. It isn't the patients.

Bullseye.

Gorilla.800.lbs wrote:
Even if every single American was within the USDA suggested BMI standards, never smoked, never drank, and all had perfect genetics, we would STILL be twice as expensive to insure as the next nearest competitor.

Our system is broken. It isn't the patients.

Bullseye.

Great point.

Disagree about moonspots. Everything else gets a huge +1.

And chemtrails. Don't forget about chemtrails!

Farscry wrote:
And chemtrails. Don't forget about chemtrails!

Chemtrails are just insurance companies trying to give us all secret diseases because they're in cahoots with Big Pharma, Big Oil, Big Food, Union Thugs, Treehuggers, Liberal Media, and The Corporations.

The real culprit is Big Airlines. follow the money! who profits the most from chem trails? The suppliers of those chemtrails. They're like Big Cartels.

And the victims are The Children.

Seth wrote:
Gorilla.800.lbs wrote:
Even if every single American was within the USDA suggested BMI standards, never smoked, never drank, and all had perfect genetics, we would STILL be twice as expensive to insure as the next nearest competitor.

Our system is broken. It isn't the patients.

Bullseye.

Great point.

Disagree about moonspots. Everything else gets a huge +1.

Watch out you two or you'll end up in my sig line.