The health reform debate raging in Congress isn’t only about fixing the nation’s health care system. Lawmakers also want to keep Americans from getting sick in the first place by encouraging healthy lifestyles. Since it’s not always easy to persuade people to do the right thing, health reform legislation would borrow a strategy some companies have used to get their employees’ cooperation: gift cards, merchandise or even cash as a reward.
Under the House health care reform bill passed in November, small businesses could get grants of up to $50,000 to help pay for employee wellness incentive programs that are approved by the secretary of Health and Human Services. The companies could provide a financial reward for workers who participate, but such incentives could not be used to reduce an individual’s health insurance premium or out-of-pocket expenses.
However, under the Senate bill now under consideration, workers who participate in proven health promotion or disease prevention programs could be rewarded with as much as a 50 percent insurance premium discount.
Insurance premium discounts
It is likely that some kind of wellness program with rewards will be part of any final health care reform legislation. But whether the final measure will allow financial incentives in the form of insurance premium discounts remains to be seen.
Patient advocacy groups, unions, consumer groups and AARP fear that the Senate’s insurance premium discounts could be awarded for successful wellness results, and that could mean lower costs for the healthy members of employer health plans—and higher costs for those who are less healthy. So even though both House and Senate bills clearly prohibit insurers from charging higher premiums based on a patient’s health or preexisting medical conditions, the concern is that a rewards system linked to premiums could provide a loophole allowing discriminatory pricing.
Unhealthy workers would end up paying more than their coworkers who succeed in a wellness program. As the gap grows, critics argue that coverage will become unaffordable for those who need it the most, and a major goal of health reform will remain out of reach.
Several business groups that support the wellness program measure in the Senate—including the U. S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable—say these incentives are a good way to control health care costs, improve productivity and help workers stay healthy. Current insurance rules allow a maximum reward of 20 percent of the cost of coverage, which the Senate bill would raise.
“My amendment would guarantee that the incentive is strong enough for Americans to want to participate,” Sen. John Ensign, R-Nev., who cosponsored the provision, told reporters when the Senate Finance Committee approved it in September. “This isn’t just about offering financial incentives; this is about making Americans healthier.”
Studies have shown that nearly 80 percent of health care costs in the United States are due to chronic illnesses, many of which are preventable or at least controllable—including hypertension, diabetes and heart disease. But experts don’t always agree on what health problems can be addressed by wellness programs and what kind of incentives—how much, how often—are most effective.
Rewards have to be carefully designed, says Kevin Volpp, M.D., director of the Center for Health Incentives at the University of Pennsylvania. People respond better when the reward is something they can see—a gift card or a check—instead of a smaller premium deduction in their paycheck, he says. Rewards that are more immediate, he says, are better than ones earned at the end of a year.