(Previously: How Fat People Will Be Helped By The Affordable Care Act.)
There are of course a zillion things in the Affordable Care Act (ACA)1 which will apply to all Americans, including fat people; but in this post I’m concentrating on aspects that will disproportionately effect fat people.
The biggest potential harm to fat people under the ACA lies in “Wellness” programs. (This was brought up by Maia in a comment on her thread.) This provision was written into the Senate version of the bill (which then became the final bill) principally by Sen. John Ensign (R-Nev.). It’s supported by groups like the Chamber of Commerce, and opposed by unions and the AARP.
Under current law employers are allowed to create “wellness programs,” in which they give employees “incentives” for healthy behavior with discounts on their health insurance costs (or with lower deductibles or the like). Of course, there’s little practical difference between rewarding healthy employees, and penalizing allegedly less healthy employees. Current law says that “wellness plan” incentives/penalties cannot be more than 20% of the cost of the insurance plan.
However, beginning in 2014, the Affordable Care Act raises that maximum to 30% of the cost of the insurance plan. So if the value of your employer-provided insurance is $4,824, then under current law employers can penalize fat employees by up to $965; but once the ACA goes into effect in 2014, the maximum goes up to $1,447.
Here’s the really frightening part of the law: “The Secretaries of Labor, Health and Human Services, and the Treasury may increase the reward available under this subparagraph to up to 50 percent of the cost of coverage if the Secretaries determine that such an increase is appropriate.”2 Here’s a table from allhealth.org (pdf), showing how much extra people might have to pay per year under current law (20%), under the ACA beginning in 2014 (30%), and if the maximum is raised to 50%.
So is it going to be just a straight 30% extra charge for fat people who get their insurance through their employer? Most of the time, no, it won’t be. Since most employers with Wellness Programs don’t seem to be going all the way to the current 20% cap, it seems likely that they won’t go all the way to the 30% cap, either.
More importantly, under the law, employers are required to provide a reasonable alternative. Here is an example, from the Department of Labor, of how “Wellness Programs” are supposed to operate:
Example 4. (i) Facts. A group health plan will waive the $250 annual deductible (which is less than 20 percent of the annual cost of employee-only coverage under the plan) for the following year for participants who have a body mass index between 19 and 26, determined shortly before the beginning of the year.
However, any participant for whom it is unreasonably difficult due to a medical condition to attain this standard (and any participant for whom it is medically inadvisable to attempt to achieve this standard) during the plan year is given the same discount if the participant walks for 20 minutes three days a week. Any participant for whom it is unreasonably difficult due to a medical condition to attain either standard (and any participant for whom it is medically inadvisable to attempt to achieve either standard) during the year is given the same discount if the individual satisfies an alternative standard that is reasonable in the burden it imposes and is reasonable taking into consideration the individual’s medical situation.
All plan materials describing the terms of the wellness program include the following statement: “If it is unreasonably difficult due to a medical condition for you to achieve a body mass index between 19 and 26 (or if it is medically inadvisable for you to attempt to achieve this body mass index) this year, your deductible will be waived if you walk for 20 minutes three days a week. If you cannot follow the walking program, call us at the number above and we will work with you to develop another way to have your deductible waived.”
Due to a medical condition, Individual E is unable to achieve a BMI of between 19 and 26 and is also unable to follow the walking program. E proposes a program based on the recommendations of E’s physician. The plan agrees to make the discount available to E if E follows the physician’s recommendations.
The Washington Post has an article describing how already-existing corporate Wellness Programs have been run. The article indicates that some employers are using Wellness Programs as a means of shifting costs onto fat people (as well as smokers and people with high cholesterol).
Valeo, an auto parts supplier, four years ago raised the deductible on an employee health plan to $2,200 from $200 for individual coverage and to $4,400 from $400 for family coverage. Then it gave employees the opportunity to reduce the deductible to its starting point by not smoking and by meeting goals for blood pressure, cholesterol and body mass index, said Robert Wade, Valeo’s director of human resources for North America.
“If they don’t comply, they end up being penalized, if you will, but we refer to it as a Healthy Rewards program,” Wade said.
Workers who choose not to submit to yearly medical assessments have been offered a different health plan that carries higher premiums, Wade said.
The New England Journal of Medicine points out that at least one major “wellness” firm is marketing wellness programs as a way that companies can save money by encouraging employees to drop employer-provided insurance:
Direct and indirect increases would disproportionately hurt lower-paid workers, who are generally less healthy than their higher-paid counterparts and thus in greater need of health care, less likely to meet the targets, and least likely to be able to afford higher costs. Some employees might decide to opt out of employer-based health insurance — and indeed, one wellness consulting firm, Benicomp, implies in its prospectus that such a result might be desirable, pointing out that employees who do not comply might be “motivated to consider other coverage options” and highlighting the savings that would result for employers.
There are limits on what employers can do. Under new provisions of the ACA, employers whose employee’s premiums cost more than 9.5% of their household income will be penalized. And those employees are eligible for federal subsidies, or to join the Health Exchanges. However, as the Valeo case shows, fat employees who cannot meet “wellness” requirements could potentially be penalized with unaffordable copayments and deductibles.3
Valeo’s program was created when the maximum size of penalties was 20% of the cost of health insurance. By raising that maximum to 30% — or possibly to 50% — the Affordable Care Act will greatly increase the incentive for more employers to institute Valeo-style Wellness Programs. Looking at the track record of Wellness Programs so far, it does seem like many employers who use Wellness Programs aren’t using them abusively. But some are, and under the ACA it seems plausible that the number of employers using abusive Wellness Programs abusively will increase.
So the big question is, what happens to people who are priced out of their employer health care by “Wellness Programs”? Can they get on to the Health Exchanges instead? Or are they just screwed? I don’t know. I’ve been emailing everyone I can think of, trying to get an answer to that question, but so the only response has been from Senator Jeff Merkley’s office, which wrote:
All employees will be eligible to get tax breaks on a sliding scale (up to 400% of the federal poverty level or approximately $88,000 for a family of four) to help them afford coverage. This assistance is particularly beneficial for those on the lower end of the income scale.
If the insurance provided by an employer would cost workers more than 9.5 percent of their household income, that insurance is considered unaffordable and workers have a new option: purchase affordable coverage on the new health insurance exchanges, and receive a tax credit to make it easier to get the coverage they need.
In regards to your concerns about employees who want to participate in wellness programs but are faced with health issues, employers must offer “alternative standards” for individuals who find it difficult or inadvisable to meet those wellness standards. The goal is to ensure that there are safeguards to prevent discrimination and accommodate special needs. I can’t give you specifics on these standards because they have not yet been defined and HHS will be determining these standards and possible exemptions in the future.
So are the wellness provisions bad for fat people? I’ll go out on a cowardly limb and say we’ll have to wait and see.
Finally, I should note that even being on the Health Exchanges won’t necessarily mean an escape from Wellness Programs. The ACA also contains a pilot program, in which up to ten states may experiment with adding Wellness Programs to the Health Exchanges. I’m less worried about government-run wellness programs being abused — governments lack the profit motive, and so have less incentive to be abusive — but this still bears watching.
