WASHINGTON, Jan. 10, 2010 -- Incentives within the U.S. Senate health care bill designed to encourage healthy lifestyles unfairly target the poor, elderly, overweight and disabled, and could be exploited by insurance companies for financial gain, advocacy groups claim.
Dozens of health, justice, and disability organizations have signed a letter urging senators to remove a provision in the health care reform bill that would allow insurers to provide reimbursements or incentives to workers who meet certain fitness goals laid out in workplace wellness programs.
In rewarding healthy people for making good choices, those who don't meet fitness goals would be unfairly penalized, the groups said.
"It's indistinguishable from medical underwriting," Sue Nelson, vice president for federal advocacy of the American Heart Association (AHA), told reporters during a Thursday call.
"This is a loophole that [insurance companies] will drive right through on day one," added Andrew Kurz, former chief financial officer of Wisconsin Blue Cross-Blue Shield. "This can lead to huge differences in premiums."
Under the existing Health Insurance Portability and Accountability Act, group health insurance plans can't discriminate based on an individual's health status by varying insurance premiums.
But the law does allow insurers to provide incentives tied to voluntary "wellness programs," either solely for participating in a workplace wellness program, or for meeting certain health and fitness benchmarks, such as reaching a certain body mass index target.
Those incentives can take the form of extra reimbursements, but they can't top more than 20 percent of the employer's cost of covering the employee.
The Senate bill would raise that figure to 30 percent, so an individual who doesn't meet the wellness goals could hypothetically be paying up to $1,410 more in annual premiums than an employee who met wellness goals.
The amount could be raised to 50 percent, with government approval. People with medical conditions that preclude participation would be offered an alternative program, the bill says.
"Such exorbitant penalties undermine a fundamental goal of healthcare reform -- the creation of a system in which no one can be charged more based on their health status," said the letter, signed by representatives of groups including the American Heart Association, AARP, the American Diabetes Association, and the National Disability Rights Network.
The basic idea sounds intuitive and hardly controversial: Reward people for being healthy.
"Weight gain and unhealthy lifestyles that focus on smoking and lack of exercise have sky-rocketed our healthcare costs," said the sponsor of the provision, Sen. John Ensign (R-Nev.), in a statement when the Finance Committee adopted his amendment in a bipartisan vote.
"These costs could be lowered by focusing on what makes us healthy -- through weight loss programs, smoking cessation, and preventive care. Voluntary employee participation in these areas should naturally be reflected in lower healthcare costs," he said.
However, it's not so cut-and-dry, advocacy groups contend. Employers could first raise premiums for workers across-the-board, and then lower premiums for employees that meet certain goals, such as having low cholesterol or reaching a certain body mass index.
Those who are unable to meet such goals would be forced to pay a high premium that could well be unaffordable.
"Attainment incentives provide welcome rewards for employees who manage to comply but may be unfair for those who struggle, particularly if they fail," wrote Harald Schmidt of the Harvard School of Public Health in a recent "Perspective" published in the New England Journal of Medicine. "In some cases, the incentives are really sticks dressed up as carrots."
"This is not workplace wellness, this is cost-shifting," added AHA's Nelson, arguing that costs would likely move from healthy employees to sick employees, and from employers to employees.
Schmidt said the incentive programs would unfairly penalize lower-paid workers, who are more likely to be unhealthy.
Advocates say it's unfair to expect the same level of exercise and diet from a law school graduate who has a gym in his condo and a single mother who works two jobs, can't afford a gym membership, and lives in an area with a limited supply of healthy foods.
"It's really important to ask what is the motivation behind these programs," Schmidt told reporters. "Is it really to make people more healthy or to reduce costs? Or to do both? In the end, there is nothing wrong if we can achieve both, but we do have a problem if ... it leads to unfairness and inequity."
Sen. Tom Carper (D-Del.), a co-sponsor of the amendment said the provision contains "strong protections against discrimination" for employees.
"Companies using similar incentives have not only seen their employees' health improve, but they have seen a significant decrease in healthcare costs," Carper said in an e-mail.
During the health care reform debate, the grocery store chain Safeway was referenced countless times as a company that implemented a successful employee wellness program that helped workers quit smoking, lose weight, and eat healthily while saving the company money.
But critics say that because the Senate bill doesn't include guidelines on what a workplace wellness program should look like, one might involve nothing more than testing cholesterol levels while ignoring fitness and motivational components, said Nelson.
Employers would have little incentive to spend money to install a workplace gym or hire smoking cessation counselors, she said.
Nelson said the AHA and other groups are working with congressional staff to remove the provision and instead have the final bill include the House language, which would merely set up pilot programs to test the idea.
A spokesperson for Senate Majority Leader Harry Reid declined to comment on whether the provision would be eliminated during conference, but said "differences will be negotiated with the House."