New Health Insurance Funding Could Charge You More For Not Exercising

New Health Insurance Funding From Personal Responsibility and Fitbit; By Charging More For Those Who Deliberately Endanger Their Own Health

WASHINGTON, D.C. (November 12, 2019) – With a major controversy raging about how to fund ever escalating medical health care costs – e.g., Medicare For All vs. reforming Obamacare – little if any thought is being given to actually reducing, much less slashing, overall health care costs, rather than simply shifting the burden of the costs, by incorporating what both Democrats and Republicans have claimed is vital: personal responsibility.

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Now a new study provides further evidence that - and may help to establish a new methodology for - using an existing technique known as differential health insurance premiums [DHIP], a methodology and philosophy adopted and recommended by the National Association of Insurance Commissioners [NAIC], to slash overall medical care costs, and to shift some of the enormous cost burden from those who exercise personal responsibility by taking care of their own health to those who deliberately endanger it and cause overall health care costs for everyone else to continue to skyrocket.

A study just published in the Journal of Gerontology:Medical Sciences showed that the amount of physical activity, as easily and objectively measured by trackers such as Fitbit, Garmin, and Apple watches, is a far more accurate predictor of death than smoking or alcohol abuse, or even from a medical history including diabetes, cancer, or heart disease.

If, as suspected, this new measure also accurately predicts medical care costs, it could open the door to charging lower rates to people who are able and who do engage in regular physical activity, as well as those who refrain from smoking, suggests public interest law professor John Banzhaf, who not only helped develop and popularize DHIP, but also brought legal actions to establish that it was permitted  for smokers under federal law.

According to the American Lung Association, smoking costs the U.S. economy more than $332 billion in direct health care costs and lost productivity every year; costs which now are largely borne by the great majority of taxpayers (for medical expenses under Medicare, Medicaid, and other programs) and workers (in the form of fewer benefits or lower salaries) who don't smoke.

Smokers have traditionally been charged more for life insurance - and in some instances for automobile and/or fire insurance - so it's only logical that Banzhaf was able to persuade the federal government to twice approve health insurance plans which charge smokers more to cover some of those added costs.

Indeed, the most recent application is the 50% surcharge on smokers under the Affordable Care Act (Obamacare); a technique which has been estimated to slash smoking rates by as much as 50%, with a correspondingly dramatic drop in unnecessary medical costs attributable to smoking.

So, if physical activity as measured by wearable fitness trackers such at Fitbit is an even better predictor of medical costs than smoking, insurers should consider also basing rates on records provided by such trackers, with those physically able to exercise but who do too little paying far higher health insurance premiums, just as many who now smoke pay much higher premiums for their health insurance.

Smokers pay higher premiums, even though most are addicted by nicotine, but the slothful who simply do not get enough physical activity have no such excuse.

Moreover, since the poor are more likely to engage in vigorous physical activities as part of their jobs or everyday life - something not true for those earning substantial incomes - they may even find it easier to meet these activity standards than high-wage earners who spend so much time at the office doing nothing physical.

Moreover, the Surgeon General's recommended levels of physical activity -  at least 150 minutes of moderate-intensity aerobic physical activity each week - can easily be achieved by running, jogging, brisk walking, climbing stairs, and in many other ways which cost nothing; thereby undercutting any arguments that the poor would not be able to meet them.

If insurance companies were to begin charging the slothful, like smokers, more for their health insurance, it would provide those who have medical insurance a strong additional incentive to exercise personal responsibility by quitting smoking and getting a reasonable amount of physical activity.

This, in turn, could slash the number of Americans who are at substantially higher risk of various diseases and conditions because they smoke and/or don't get enough exercise, and trigger a corresponding reduction in unnecessary health care costs which amount to hundreds of billions of dollars.

The new study focused on the elderly, but there is every reason to believe that the same metrics  - smoking status and level of physical activity - will also be accurate predictors of medical care costs for the entire population.

Moreover, the elderly population is especially important, because  people age 55 and over account for over half of all health care spending.



About the Author

JOHN F. BANZHAF
JOHN F. BANZHAF III, B.S.E.E., J.D., Sc.D. Professor of Public Interest Law George Washington University Law School, FAMRI Dr. William Cahan Distinguished Professor, Fellow, World Technology Network, Founder, Action on Smoking and Health (ASH) 2000 H Street, NW, Wash, DC 20052, USA (202) 994-7229 // (703) 527-8418 http://banzhaf.net/ jbanzhaf@law.gwu.edu