Should thin people have to pay Medicare and other health costs - Research Paper Example

OUTLINE Obese people should pay higher premiums than slim people as this will influence them to be cautious in matters concerning their health. 1) Implications of Obesity In Terms Of Medicare and Other Costs A) Obesity is not limited to the obese individuals only, but to the entire society. i. Obesity has cost ramifications to each individual regardless of his/her weight. ii. Medical costs that result from obesity and overweight are either direct or indirect. iii. Individuals who are obese are not only faced by health problems but high costs which cannot be borne by them solely but are also transferred to the society. B) On the societal level, slim individuals have been highly affected i. High fuel costs that result from obesity translates to higher costs for air tickets even for slim individuals. ii. Individuals are paying extra funds for healthcare regardless of their weight or health. iii. Government is facing escalating costs through the provision of Medicaid and Medicare. 2) Using Higher Health Insurance Premiums to Combat Obesity A) Obese individuals are benefiting more in terms of healthcare i. Premiums are not dependent on weight. ii. There is an increase in the number of obese individuals who are unfairly benefiting from the insurance pool. iii. Premiums should be internalized as pooled insurance fails to provide for the adjustment of premiums in accordance to weight B) A mechanism that can come to the rescue of this situation is the wage setting. i. Employer can adjust the wages of employers in such a way that the high medical expenditures of the obese individuals are borne solely by them. ii. This would result in optimal conditions in the pooling of risks associated with health. iii. Obese employees tend to cost more than normal employees cost in terms of employee insurance. A Selected Annotated Bibliography On Obesity and Its Cost Implications Bhattacharya, Jay and Neeraj Sood. "Who Pays for Obesity?" Journal of Economic Perspectives 25.1 (2011): 139–158. Print The authors of this journal article are famous for researches on healthcare. In this article, Bhattacharya and Sood address the economic costs of obesity to the society. Through various statistics the authors found out that the existing healthcare program caters for the problems of obese people through the use of funds from normal individuals which should not be the case. Regarding this , the authors suggest that the obese individuals should pay higher premiums to cater for their healthcare problems and to be more cautious with their dietary choices. The importance of this article to this bibliography is that it brings an economical analysis of the costs of obesity. Bhattacharya, Jay, et al. "Does Health Insurance Make You Fat?" July 2009 . Web. 17 April 2012. In this article, the authors critically analyze the concept of healthcare premiums. The authors argue that health insurance tend to make individuals less concerned about their health problems hence increasing cases of obesity. The authors have also indicated that programs such as Medicaid and Medicare fail to address the problem of obesity. Moreover, the authors have suggested that a difference in wages in which obese people are paid less will help them to take necessary measures regarding health. This article is important to this annotated bibliography as it addresses the concept of pooled insurance in which obese people benefit unfairly from premiums paid by normal individuals. Bauer, Brad. “Higher Premiums for Obese Workers Growing.” News and Sentinel, 20 November 2011. Web. 17 April 2012. Bauer is a consultant in insurance-related matters, whose articles on healthcare insurance demonstrate his experience in the field of insurance. In this article, Bauer has highlighted that obese people benefit more from healthcare since they pay equal premiums with normal people. In this article, the author articulates that premiums are being internalized so that the obese individuals can bear the burden that results from costs of catering for their health problems. Moreover, the author indicates that companies are imposing higher premiums for obese employees. This article is important in this bibliography as it shows the step that companies have taken to deal with employees who are ignorant of their health. Rossen, Lauren M and Eric A Rossen. Obesity 101. New York: Springer Publishing Company, 2011. Print Rossen and Rossen are medical practitioners who have been conducting research on matters relating to obesity. In this book, these authors have defined obesity and highlighted the numerous economical costs that accrue from obesity. These costs have been analyzed in terms of individual and societal level. According to Rossen and Rossen, normal individuals in health insurance are paying higher premiums to cater for the costs of treatment of obesity-related ailments. In addition, the government has been catering for numerous costs through Medicaid and Medicare. This book is important to this bibliography as in analyses the costs resulting from obesity on various levels. Simpson, A Lisa and Julie Cooper. “Paying for Obesity: A Changing Landscape.” Pediatrics, 2012. Web. 17 April 2012. The authors of this article have conducted research on matters concerning obesity. In this article, Simpson and Cooper conduct a research to determine the type of initiatives put in place to deal with obesity. This is achieved through the use of interviews in which the authors found out that employers and insurers have used numerous strategies. Among these strategies is the use of incentives such as wellness policies. According to Simpson and Cooper, the state has also been involved through formulation of legislation compelling obese individuals to cater for their health problems. This article is important to this bibliography as it articulates various strategies of mitigating the costs arising from obesity. Medicare and other health costs for the health problems of obese people Introduction Obese individuals impose high health costs on the entire population. This cost is borne even by individuals who are normal and are conscious about their eating patterns unlike their obese peers. This is because, the major health ramifications that are brought about by obesity lead to a heavy healthcare burden which the obese people cannot bear alone. Serious diseases that are linked to obesity make the obese people expend more on health than their normal counterparts. Looking at the healthcare spending on a lifetime perspective the issue on who bears these medicare and healthcosts rises. This pespective shows that tax payers bear the burden of medicare costs of obese individuals (Bhattacharya and Sood pg144). Obese people should pay higher premiums than normal people as this will influence them to be cautious in matters concerning their health. Discussion Obese people are known to contact severe diseases more than individuals who are normal. These diseases translate to a huge healthcare burden, which is borne by the entire society. A lifetime survey of the costs arising from the treatment of chronic diseases linked to obesity such as hypertension, stroke and diabetes among others, shows that these costs are high than the medical costs of non-obese individuals. These costs can be reduced by a significant amount following a small percentage reduction in weight through self-control and observing stringent measures with regard to diet. It is important to note that since medical costs are higher for overweight individuals and that premiums are not dependent on weight, the normal people assume the responsibility of paying towards the catering of obese individuals who are not cautious with their exercise and feeding habits. Moreover, the health problems of obese individuals render them inability to pay for the social programs that are mandated by the government (Seeman and Luciani pg16). Following the economical impediments that are brought by obese people, a significant number of companies are imposing higher premiums for obese employees. This move is crucial in ensuring that insurance rates are kept in check. These companies are doing this by offering discounts to employees who are keen in participating in programs that promote general body fitness. Apart from costs due to the effects on personal health, the expenditures on healthcare resulting from obesity are numerous. These healthcare costs are not only borne by the government but are also by the private sector (Phillips para7). The study by Bhattacharya, Bundorf and Pace (2009) (pg6) has addressed the issue of economic implications of obese individuals to the society that comprises of individuals who are normal. Through their research, Bhattacharya, Bundorf and Pace (2009) (pg6) found out that there exists a relationship between insurance, obesity and wages in which the subsidies that obese people receive through pooling in health insurance are borne by non-obese individuals and should be offset through the imposition of a difference in wages. Moreover, apart from health insurance benefits, other fringe benefits such as vocational training, retirement benefits, dental insurance and life insurance should vary according to the weight of the worker. This is because the aforementioned benefits tend to determine the quality of the work of the employee. Given that the differences between the medical expenditures of the obese and the non-obese people increase with age, the obese workers should pay higher premiums to offset the burden that is currently being borne by the non-obese individuals (Bhattacharya and Sood pg152). Health insurance tends to make an individual ignorant about his/her health condition, which makes the social losses that accrues from obesity to be many. Insurance programs such as Medicare provided for the elderly, and Medicaid that is provided for the poor, shield individuals from seeing the true costs that are brought about by obesity. Subsidies that are provided to obese people from health insurance pools lead to substantial loss in welfare as they induce individuals to gain more weight (Mullen pg3). Through Insurance in public health, one is able to estimate the effects of health insurance on the weight of the body. The prevalent coverage in health insurance is highly generous to the obese individuals at the expense of their normal counterparts. There are scenarios that perfectly highlight how obese individuals are benefiting from health insurance. An example is that, through generous coverage, people with free healthcare tend to gain weight instead of making necessary efforts towards losing weight (Mullen pg3). Implications of Obesity in Terms Of Medicare and Other Costs Obesity is not a problem that is limited to the obese individuals only, but to the entire society. Obesity has widespread cost ramifications to each individual regardless of his/her weight and health situation (Koletzko p122). At individual level, obese individuals spend more on healthcare as they undergo treatments that culminate to weight loss. Medical costs that result from obesity and overweight are either direct or indirect. Direct costs are diagnostic, preventive and treatment services for the diseases resulting from obesity. On the other hand, indirect costs are costs that are related to mortality and morbidity, whereby the former refers to costs emanating from premature death whilst the latter is a reference to cost implications brought about by income loss due to a decrease in productivity (Centers for Disease Control and Prevention para1). Surgery and nutritional counseling are other avenues in which the obese individuals have to channel their funds in order to deal with their predicament. In addition, there are some instances whereby individuals are discriminated in the workplace through payment of lower wages (Liebenson para5). Other costs that result from obesity are gasoline costs and expensive clothing among others. In the light of this, individuals who are obese are not only faced by health problems but high costs which cannot be borne by them solely but also by the society (Rossen and Rossen p23). On the government or societal level, normal individuals have been highly affected. Particularly in air transport, obese individuals pay for two airline tickets. Fuel costs that result from obesity translates to higher costs for tickets even for normal individuals. A significant percentage of healthcare expenditure by the government goes to the treatment of obesity related ailments. The government and private companies have to bear with the losses that accrue from missed workdays and production that is lost because of obesity. Moreover, in private insurance of healthcare, higher premiums are paid by individuals to cater for obesity and its related problems (Rossen and Rossen p25). According to Rossen and Rossen(2011) (p25), Individuals are paying extra funds for healthcare regardless of their weight or health. Given that employers often pay for health premiums for their employees, costs emanating from obesity are borne by all employees regardless of their health status. Government is facing escalating costs through the provision of Medicaid and Medicare, disability programs and the issues that result from workforce productivity. Necessary Interventions to Deal with Obesity and Its Costs There are numerous initiatives that have been formulated to deal with the problem of obesity. This has come because of obesity garnering a lot of attention from policymakers, health planers and employers at a state level. This attention is due to the high costs of the obesity epidemic. Employers are in the frontline in the development of responses aimed at combating obesity. These responses are directed at employees through various innovations. These innovations include using incentives such as wellness policies in which the employer rewards or penalizes employees based on their health status. The wellness policies include discounts and surcharges on insurance to workers who have low-risk such as normal workers. Employees are also rewarded for demonstration of behaviors that enhance health (Simpson and Cooper para6). Health plans have been formulated to deal with obesity in order to reduce the burden that is being borne by the society. Insurers and employers are undertaking numerous activities to ensure that normal employees do not bear the burden of obese employees. The major point of focus for insurers and employees has been adults with children receiving similar attention due to the rise in the number of obese children (Blom-Hoffman para3). This has been achieved using benefit programs that are community based. These benefits programs include collaborating with schools, deployment and training of peer educators especially for children and involving local governments in order to enable children to have access to facilities that promote physical activities. Various health plan teams are embarking on interventions, which are school based with the view of promoting the consumption of vegetables and the provision of a curriculum that offers nutrition tips to students. The aforementioned strategies are crucial in dealing with childhood obesity (Simpson and Cooper para15). Through a revelation by Medicaid program that a significant number of public employees are obese, programs that promote healthy behavior for the employees have been developed in order to alleviate the cost impact associated with obesity. The state has also been instrumental in ensuring that the obese individuals cater for the costs resulting from obesity-related complications. This has been achieved through formulation of legislation that requires individuals to cover for the treatment of obesity-related ailments such as diabetes (Simpson and Cooper para18). Using Higher Health Insurance Premiums to Combat Obesity Although both the obese and the non-obese individuals have continued to enjoy various forms of healthcare, the obese individuals benefit more in terms of healthcare through equal premiums in healthcare insurance. The existing scenario whereby the premiums are not dependent on weight may encourage even the normal individuals to exercise less and eat more leading to the escalation of obese incidences which will translate to medical costs. Moreover, normal individuals may drop their insurance cover due to escalating premiums in insurance because of an increase in the number of obese individuals who are unfairly benefiting from the insurance pool. The premiums should be internalized as opposed to the prevalent scenario whereby the premiums are adjusted due to health risks hence benefiting the obese individuals and making other non–obese individuals to bear the burden of the obese individuals (Bauer para1). Pooled insurance fails to provide for the adjustment of premiums in accordance to weight. This leads to lack of incentives for people to engage in the reduction of body weight. However, this should not be the case as it leads to a situation whereby all the members of the pool cater for high expenditures of few members within the pool. An example of pooled insurance is health insurance that is provided by employers. Other examples of pooled insurance are public programs that deal with insurance such as Medicaid and Medicare (Bhattacharya, Bundorf and Pace pg6). Over a long period, this pooled insurance has failed to lead to a change of behavior in trying to curb obesity. Subsequently, all the payments that are made by normal people have been transferred to cater for obese individuals within the pool. Health insurance that is not public is sold to consumers using two mechanisms. The less common one is the one in which consumers are covered directly. In this form of health insurance, the premiums that are charged to consumers increase with an increase in expected expenditure on medical care. This form of health insurance covers for a few individuals in America with almost similar health problems and hence the externality brought about by obesity is limited (Bhattacharya and Sood pg152). The other mechanism involves an insurance contract that covers around 200 million individuals in America. This is a part of employment package. In this mechanism, the premium contributions of the employee are rarely adjusted for the risks accruing from obesity or other health related predicaments. Legal provisions are put in place to prohibit employers from changing the contributions of the employees based on health factors. This renders individuals who are non-obese to be pooled together with obese individuals (Bhattacharya and Sood pg149). A mechanism that can come to the rescue of this situation is wage setting. The employer can adjust the wages of employers in such a way that the high medical expenditures of the obese individuals are borne solely by them through lower wages especially in the firms where employees are covered through health insurance that is employer-sponsored. In case the wages of the obese individuals are lowered with the view of offsetting the difference between the medical expenditure of obese and thin individuals, this would result in optimal conditions in the pooling of risks associated with health. Moreover, this would enhance many aspects of worker productivity (Bhattacharya and Sood pg149). The other justification for employers to financially discriminate obese employees is that these employees tend to cost more than normal employees cost in terms of employee insurance. Moreover, the market tends to impose enormous pressure on firms that offer health insurance that is employer sponsored, through provision of the same wages for normal and obese employees. In the light of this, firms in the competitive market who offer health insurance can make greater profits through the employment of normal workers only. This is likely to occur incase wages are not adjusted based on body weight (Bhattacharya and Sood pg150). Conclusion In conclusion, obesity is a health problem, which should be a source of concern for the individuals who are suffering from it or those at risk of being obese. This is because there are serious health problems that arise from obesity which include diabetes and hypertension among others. Apart from health ramifications, individuals suffering from obesity impose numerous externalities on their non-obese counterparts. In the light of this, obese individuals should internalize the costs that they impose to normal individuals through the payment of higher premiums in healthcare insurance. This move will enable them to exercise control over exercise and dietary habits. Works Cited Bauer, Brad. “Higher Premiums for Obese Workers Growing.” News and Sentinel, 20 November 2011. Web. 17 April 2012. Bhattacharya, Jay and Neeraj Sood. "Who Pays for Obesity?" Journal of Economic Perspectives 25.1 (2011): 139–158. Print Bhattacharya, Jay, et al. "Does Health Insurance Make You Fat?" July 2009 . Web. 17 April 2012. Blom-Hoffman, Jessica. “Obesity Prevention in Children: Strategies for Parents and School Personnel.” Communique, November 2004. Web. 17 April 2012. Centers for Disease Control and Prevention. “Overweight and Obesity.” Centers for Disease Control and Prevention, n.d. Web. 18 April 2012. Koletzko, Berthold. Drivers of Innovation in Pediatric Nutrition. Unionville: Karger Publishers, 2010.Print Liebenson, Donald. “The Crippling Costs Of Obesity In The Workplace.”Kaiser Health News, 16 July 2010. Web. 17 April 2012 Mullen, Cameron. "Health Insurance Pooling Between Thin And Obese In Europe." 1 June 2011.Web. 17 April 2012. Phillips, Kade. “Obesity and Your Health Insurance Costs.” Kanetix Ltd, 2008. Web. 17 April 2012. Rossen, Lauren M and Eric A Rossen. Obesity 101. New York: Springer Publishing Company, 2011. Print Seeman, Neil and Patrick Luciani. XXL: Obesity and the Limits of Shame. Toronto: University of Toronto Press, 2011.Print Simpson, A Lisa and Julie Cooper. “Paying for Obesity: A Changing Landscape.” Pediatrics, 2012. Web. 17 April 2012 Read More