A fine for being fat?

It’s no secret that it is becoming incredibly expensive to pay for the high cost of care for people who smoke and are obese.

There is a fierce debate ensuing about who should pick up the tab, and what is reasonable in terms of penalties.  Over the past few weeks there have been a number of new scenarios, which suggest being obese could start to get really expensive.

1. Workplace penalties. Recently, CVS CareMark sent a letter to employees on its health plan that they need to get a physical, weigh-in, and also have their blood pressure, body fat, cholesterol and blood sugar checked, or pay a $50 penalty per month on their insurance premiums.

There are some patient privacy groups who have criticized this policy as intrusive, but don’t be surprised if you see more companies going down this path.  A bulk of an employer’s cost is often spent on conditions related to obesity, including diabetes and high blood pressure.  To the extent that they can control costs by encouraging healthier behavior, it’s not only beneficial to them from a cost perspective, but more importantly, ensures employees show up for work and remain productive.

2.  Who is paying for excess baggage?  With the rising cost of fuel, the impact to airlines in excess weight is not a trivial issue.  In fact, an economics professor in Norway proposed certain options that could be coming in the future: Airline fares could be based on the actual weight of the passenger, at a fixed rate per pound.  Or, there would be a base-fare for average-weight passengers, with airlines charging an extra fee for heavier flyers, or offering a refund to skinnier ones.

Another proposed option is that fares would be based on whether people are fat, below or above-average weight.   While there is no definitive policy established, it is certainly believable that airlines could ultimately take these options into serious consideration.

3. Attacks on 'Super-Size.'  Mayor Bloomberg’s recent ban on super-sized beverages received a lot of push-back from manufacturers and some consumers.  Some critics contend consumers will mainly “game” the system to get around the ban and never change behavior.  The idea of a ban or financial penalty on junk food is not new, but certainly the sky-rocketing costs associated with the rise in rates of obesity will likely accelerate how aggressive states and employers get in breaking the trend.

The annual health care costs for obese people is close to $150 billion.  Despite this enormous cost, some argue that since obese people die five to 12 years prematurely, does it even matter whether penalties are placed to encourage healthier behavior?

What many fail to recognize is that while being obese doesn’t necessarily affect others directly (unless you’re on a plane, of course), it does impact risk-pools for health insurance.

Under the new model, as sicker people also get insurance, premiums could ultimately go up for everyone as the risk-pool becomes more severe.  Economists will often argue whether a carrot or stick is more effective in changing behaviors.

Whether you are an employer, there will certainly be economic incentives for engaging in healthier behavior, and penalties for not doing so, so there may be both a carrot and a stick.  In other areas of our day-to-day life, as in the airlines we fly, or where we shop, we may less likely find incentives, and more likely penalties for being obese.

Since insurance companies are not allowed to charge more for people who are overweight, it is almost certain that no one is going to sit back and merely let this growing epidemic continue to soar.