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10 Pounds Overweight? Got High Cholesterol? It Could Cost You Big Unless the Dems Fix the Health Care Bill

A little-discussed provision of the Senate bill allows insurers to penalize subscribers by hundreds -- and even thousands -- of dollars for not meeting certain "wellness targets."

When House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid agreed to negotiate a final health care bill without a formal conference committee, they did so to cut short the number of procedural obstacles Republicans could place in the path to a final health care package. The downside of that decision means that the contours of the less progressive Senate bill—with no public health insurance plan and a tax on employers who offer excellent health insurance for their employees—are likely to shape the final outcome. And that could mean even less reform than we thought we were about to settle for.

After the ditching of the public option and the trashing of a Medicare buy-in, the Senate health care bill, we were told, was still worth passing because it would end discrimination by insurers based on a subscriber's health status. No more discrimination based on preexisting conditions, right? Well, not exactly.

A little-discussed provision of the Senate bill allows insurers to expand so-called wellness programs that allow insurers to penalize subscribers by hundreds—and even thousands—of dollars for not meeting certain "wellness targets," such as a particular cholesterol number, blood sugar measurement or body-weight target.

Remember all those Democrats pleading plaintively, in the face of Republican accusations that the GOP had been cut out of the health care debate, that actually they included many Republican ideas in their health care bills? Well, this is one of them. One of the pro-business innovations of the Bush administration was to introduce into health insurance regulations a provision allowing employers to offer loosely defined "wellness" programs that carry incentives for employees meeting certain standards of premium reductions of as much as 20 percent. Sounds like a pretty good deal, right? Sure, until you realize that there's no baseline for the original premium, meaning that, in reality, people who don't meet the standards are really carrying the burden of others' discounts and then some—paying as much as 20 percent more for a policy in which a family member's failure to meet a wellness target forces up the entire premium for that family's policy. 

If you think that's a raw deal, consider the Senate health care bill provision introduced by Sen. John Ensign, the disgraced Republican of Nevada. Now that percentage of discount or penalty, depending on which end one finds oneself, can amount to a differential in one's premium to 30 percent, and eventually to 50 percent.

"Insurers can spot profits a mile away, and this is a loophole they will drive right through on day one," said Andrew Kurz, the former chief financial officer of Wisconsin Blue Cross-Blue Shield on a recent conference call with reporters convened by the advocacy group, Health Care for America Now. "We got into this mess because insurers unfairly targeted sick people and charged higher premiums based on illness status. To now charge lower premiums based on wellness status can lead to the same result. Like the water glass, half full or half empty, it is still the same amount of water."

In other words, while insurers may no longer be able to drop your coverage for a preexisting condition such as high blood pressure, under the Senate bill they will be able to charge you and your employer as much as 50 percent more for your total premium cost if you fail to meet a targeted blood pressure or cholesterol measurement. These wellness programs are predicated on the notion that your workplace will offer support for meeting your targets, though standards for that support are nearly nonexistent. For example, if your employer, in the guise of a wellness program, offers little more than an aromatherapy session for reducing stress, you could still be penalized for your stress-exacerbated condition, according to Sue Nelson, vice president of federal policy for the American Heart Association.

"Although described as incentives, this practice actually allows employers to raise costs across the board for everyone, and then lower them selectively for those who meet certain targets," Nelson told reporters. "So incentives quickly become penalties for those who do not meet the targets, and therein lies our concern."

And we're talking real dollars here. Current regulations allow companies that offer wellness programs to vary costs per family policy by as much as $2,675, based on the average cost of a family plan derived from the 2009 Kaiser/HRET annual survey of health plans. Under the Senate bill, those cost differentials climb to $4,013 at the 30-percent level, and $6,688 at the 50-percent level, which would kick in later in the implementation schedule. (Find the AHA's fact sheet here.)

Even more troubling is the way the provision targets for penalties people least likely to be able to control the circumstances that lead to their inability to meet wellness targets—the poor and those with genetic predispositions to certain conditions. "Poor people are faced with a double whammy," explained Harald Schmidt of the Harvard School of Public Health. "Firstly, they have to live in circumstances that make it much more difficult for them to be healthy and, secondly, it’s likely that health insurance will become less affordable for them...."

People who live in poverty have less access to healthy food, he said, and the working poor often lack the time to schedule regular exercise as they often work more than one job.

Certain ethnic and racial groups, such as African Americans and Native Americans, face genetic predispositions to diabetes and hypertension, making it far less likely that they can meet targets. According to a 2005 study produced by the Kaiser Family Foundation, some 30 percent of African-American women over the age of 45 have diabetes. An issue brief (PDF) prepared by the National Partnership for Women and Families states that the wellness program provision in the Senate bill unfairly penalizes women, especially those who are caring for children or elders or both. Women are more likely than men to have chronic conditions such as those targeted by wellness programs.

"We are also concerned about proceeding in this direction because of substantial evidence that patients are actually less able to manage chronic conditions such as hypertension or diabetes when their deductibles or co-payments are too high," the American Heart Association's Sue Nelson said. Teaming up with the American Cancer Society and the American Diabetes Association, the AHA penned a letter to congressional leaders asking that the Senate's wellness program provision be dropped in favor of one contained in the House bill, which HCAN also supports, that does not penalize subscribers for failure to meet so-called wellness targets. Some 200 advocacy organizations, including the National Organization for Women, have signed the AHA letter.

Adele M. Stan is AlterNet's Washington bureau chief.