Weighing Solutions To A Big American Health Problem

Terrifying statistic of the day: the CDC says that the national spike in obesity will result in one out of every 3 kids born in the year 2000 developing type 2 diabetes at some point in their lives.

If the number of fatal auto accidents rose 40% in less than 10 years it would be considered a national crisis with Congressional hearings and loud calls for changes in auto and driver safety.   Yet the big jump in health risk and attributable costs due to a 40% jump in obesity levels in the same time period has garnered nary a peep from Washington.

As Congress, the President and the pundits argue about insurance costs and how to pay for health insurance for the uninsured, few are discussing why insurance costs are so high.   Simply put, health care costs are soaring in large part because we are getting larger.

The numbers, too, are large.  25% of Americans are obese.   One in 5 kids is overweight or obese.   Overweight kids have an 80% chance of becoming overweight or obese adults.   Low estimates peg the cost at $150 billion dollars per year spent dealing with obesity and related diseases, including a large percentage of Medicare and Medicaid spending.   In 2006, one study reports obese people spent an additional $1,429 each more per year than the non-obese; primarily on prescription drugs.   And because Medicare taxes are fixed-- regardless of the health of the taxpayer-- 75% of the country who are not obese are paying about $475 each more per year to fund the high cost of heavy weight.

The numbers are staggering, and we have no one to blame but ourselves.   And this begs the question of why we don't hear more about better personal care from Washington.    While the President did say recently a sugar tax may be an "idea worth exploring," politicians generally do not discuss this issue as part of the health care problem primarily because it involves pointing the fat finger at the voters, and everyone knows it's political suicide to blame your base.

The answer starts with changing behavior.   The health benefits of staying within a healthy weight range have clearly not been enough incentive to prevent the growth of belt sizes.   It's time to get tough and start paying up.

Some countries and American municipalities are experimenting with higher medical co-pays for those with obesity level body fat percentages.  While this is good, any similar state or national push in this direction will no doubt be attacked as discriminatory and fraught with legal hurdles.   Taxes on obesity are often criticized as taxes on the poor due to the high rate of obesity in poorer areas (this begs the question about what the poor ate before fast food, as it became ubiquitous only in the last 30 years).   Instead, we must push for healthier behavior with lower tax and insurance costs for those who take care of themselves.

By some estimates, up to 70% of all health care costs are the direct result of human behavior.    The grocery store chain Safeway, known for its innovative company health insurance program, has found that 80% of cardiovascular disease and diabetes and a whopping 90% of obesity are preventable.   Yet on a wide scale there is little being done to use dollars and economics to alter destructive and high cost behavior.

Case in point: my former employer was known for its free snack bar.    Chips, soda, cereal, coffee and even ice cream in the summer were all there for the taking.  It was hard to resist, and some did better than others avoiding temptation.    One of my coworkers (I'll call him Ron) was probably the most fit person I've ever known.   Not only did he frequently run marathons, but he actually was one of just a few hundred people crazy enough to push himself through the Sahara desert marathon.    He probably had about no-percent body fat and would generally only eat fruit and cereal from the bevy of food court offerings.    Sammy (not his real name, of course) meantime was more tempted by the salty selections and would help himself to multiple bags of chips, sodas and other less healthy options throughout the day.   His exercise seemed limited to the walk to and from the food court.   As you might imagine, their body types differed greatly.  Yet despite the huge difference in fitness levels and the statistical likelihood of greater health problems between the two, 'Running Ron' and 'Soda Sammy' pay the same Medicare tax rate and would pay an equal employer health insurance payroll deduction.   Worse, studies indicate because he knows his bills will be paid regardless of his medical condition, Sammy is likely to disregard the need for a better diet and gain even more weight.   This makes little economic sense.

Just as safe drivers pay lower auto insurance rates and non-smokers pay less for life insurance, 'safe' Americans should pay less for health insurance both on a company and national basis.    Accomplishing this is easy and rational.

First, we establish a nationwide health discount program.   Americans who wish to participate (and there is no requirement to do so) visit their doctor annually for a body mass index test.    Those with a BMI under 25 (the level where the CDC considers being technically overweight begins) pay o.5% less in Medicare tax the following year and receive a 25% discount on health insurance.    This will save the employer 0.25% on payroll tax and also reflect in lower premiums for that employee.    Good companies would then return these savings to that employee in the form of a bonus.   The self-employed can submit the test results from their doctor directly to their insurer, who can drop the premiums by 25% the next year.   Should employees 'fail' the BMI test, their rates and co-pays return to standard levels for the next year.    And while BMI tests are not perfect, it is the best we have and the program can evolve as tests do.

The math makes sense.   A 0.5% reduction in Medicare tax on a $60,000 income saves the employee and employer a combined $300 per year.    The average health insurance premium at American companies is more than $12,000 per year for a family of four, so assuming both the adults 'pass' the BMI test it would save them an additional $1,500 per year ($12,000/2 * 0.25).   $1,800 kicked back for good behavior is certainly a better spend than the alternative high costs of obesity-related chronic diseases, which will only get worse with age.

Opponents will argue Medicare funding is already tight, and any reduction in Medicare revenue will only further burden the system.     It might, but the tax break would potentially incent millions of people to drop a few of those extra pounds, cutting health costs in the long run.   Additionally, as Medicare taxes are not income capped, and obesity often inversely relates to income, it may provide a slight tax break for American workers who are keeping themselves the most healthy.    Those arguments aside, critics should simply consider the thousands of extra dollars 'Running Ron' has been paying for years to help pay for those extra $147 billion in obesity related costs he's not responsible for.   A healthy dual income family making $120,000 per year may not use Medicare or Medicaid benefits for decades, yet they are paying nearly $4,000 per year into the system for those who do.

As the health care debate evolves, its time for Washington to get serious about individual responsibility and personal choices.  The answers may not always be clear, but what is clear is that whatever we are now doing isn't enough.   For a truly American solution to a big American program, we must get serious and add dough to the diet issue.