More Employers Hike Health Care Costs For Smokers And Obese

smoking employees higher healthcareOver twice as many Johnson & Johnson employees exercised last year compared to 15 years before, a third as many smoked, and less than half had high blood pressure. It was in 1995 that the health care products giant launched its wellness program.

Some wellness programs are rollicking success stories. Johnson & Johnson executives estimate that theirs has saved the company $250 million on health care costs through the 2000s, reports the Harvard Business Review. That's $2.71 for every dollar spent.

But too often these programs are sabotaged by low-participation. Employees may lack the time and interest, or they simply prefer to keep their bodies and health separate from their work lives. But soon employees may have no choice; rather than enticing workers to hop on a treadmill with on-site gyms, free counselors, t-shirts, and punny posters, an increasing number of employers are making the unhealthy pay more.

Nineteen percent of small and mid-size companies already charge smokers, the obese and other high-risk employees higher health care premiums, reports Reuters, up from 8 percent in 2009. Next year, that number will rise to 40 percent. Wal-Mart Stores, Inc., which insures over 1 million people, is one of them. In 2012, the world's largest retailer will make smokers pay higher premiums, while also offering free smoking cessation programs.

The swelling costs of health care premiums have helped propel the harsher tactic. Employer-sponsored health insurance covers around 150 million non-elderly Americans. The average cost for single coverage is now almost $5,500, and for a family plan, over $15,000, according to a survey by the Kaiser Family Foundation and the Health Research and Educational Trust. That's 31 percent higher than five years ago. The growth rate for premiums was 9 percent this year.

With a dragging economy, these numbers have hit employers hard, especially with fewer young and healthier hires, and more older workers delaying retirement and taking advantage of employer-sponsored insurance. In a time of high unemployment, companies also feel less pressure to compete against each other with generous benefits packages in order to recruit workers. Workers are just happy for a job.

There are concerns about these new policies from both liberal and conservative camps. "It's not inherently wrong to hold people responsible," Lewis Maltby, president of the National Workrights Institute, told Reuters. "But it's a dangerous precedent. Everything you do in your personal private life affects your health."

This kind of penalization is likely to hit low-income employees harder. According to a 2010 Gallup poll, individuals earning less than $24,000 a year were 50 percent more likely to be obese and have high blood pressure, over three times more likely to suffer a heart attack, almost three times more likely to be diagnosed with depression, and over twice as likely to have headaches or the flu than Americans with an annual salary of $90,000 or more.

Almost triple the number of low-income Americans smoke. This group is also less likely to eat healthily and to exercise -- in part at least because of less time, resources, health education, and access to fresh produce and fitness facilities.

While some may commend the ethos of personal responsibility that girds these policies, others are put off by the idea of employers playing "nanny" in employees' lives -- monitoring and even punishing how they behave in their free time.

But people respond well to financial incentives. The United States spends $2.6 trillion on health care every year -- the G.D.P. of France -- and older Americans have significantly higher rates of cancer, diabetes and heart disease than their European counterparts. And if cheap fast food is no longer a money-saver, and smoking becomes even more expensive than before, these new policies could ultimately make for healthier employees, citizens and human beings.

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