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Pro / Con

The fairness of health insurance incentives

Many employers offer discounts to workers who take steps toward better health. This can cut costs and encourage wellness, but it could also penalize those who can't make the changes and yet will pay more in premiums.

January 03, 2011|By Brendan Borrell, Special to the Los Angeles Times

"Most people tend to be not very good at making trade-offs between immediate gratification and future health benefits. There's a probability that something bad will happen to them, but it's not definite, whereas the cost of changing a behavior is immediate and often requires a lot of effort. An incentive program can be helpful in areas like smoking, where it can help change the equation so people weigh the future consequences of their actions.

"Indeed, in our study with GE employees, we provided financial incentives up to $750, which is approximately the annual cost difference between a smoking and nonsmoking premium. That incentive tripled the long-term smoking cessation rate, and in January 2010, GE decided to implement the program for all their employees.

"I believe that these programs can be implemented fairly. Lower-wage workers tend to have higher rates of the health problems we're trying to fix: smoking and obesity. Consequently, offering programs for these conditions might disproportionately help lower-income people. I'm not sure why some people think they are going to be less likely to be helped. The same dollar amount may have a greater impact on a lower-income person.

"One of the things that is unanswered is whether, when you do a program, you should offer awards based on achievement of outcome or effort. The evidence out there suggests that it is less effective to pay for effort than outcome. There are lots of reasons you can imagine simply showing up at a smoking cessation program doesn't work on its own — because many programs aren't that effective. Rewards for achieving better outcomes, on the other hand, seem to work quite well."

health@latimes.com

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