Alabama’s “Fat Tax” Plan

According to The Huntsville Times, the state of Alabama is ranked among the worst in the country for obesity, diabetes, and lack of exercise.  It has even been postulated that the state’s obesity problems are contributing to its also high rates of infant mortality.  Their state health officer, Don Williamson, stated in a public forum that the high obesity rates among pregnant women contributes to higher rates of diabetes, which then increases the risk of infant mortality.  The article goes on to say that Alabama has either the second or third highest rate of obesity in the country at 30.1%.

Apparently the state has decided to mobilize its resources to tackle this problem, and the solution has not been been well-received.  The most recent example of this effort comes in the form of a so-called “fat tax.”  The state is instituting a program for all state workers, which includes a voluntary health screening, which is going to be focused on obesity, high blood pressure, blood glucose, and cholesterol.  If a participant shows signs of health problems, they would then be required to complete a doctor’s consultation and take steps to improve these markers.  Now comes the rub — those that fail to complete the health screening, or fail to act on a negative result, will be required to pay an additional $25/month for their health insurance premiums.

This has apparently caused quite the uproar.  I first heard about it on a Dave Ramsey podcast, but it has been discussed elsewhere as well.  Critics say it unfairly punishes people for genetic factors outside of their control.  They also suggest that the use of a negative tool will not change participants behavior.  They might be right about that, but I can understand the sentiment by plan providers.  It is a fact that certain measurable factors increase the risk for disease.  In the case of obesity, there is strong evidence of the link with heart disease and diabetes.

One interesting thing to me about this debate is that three years ago, Alabama added a $24/month insurance charge to state employees who smoke.  I certainly didn’t hear a big national debate about the unfairness of that surcharge.  I guess these days, most of us accept that fact that smokers pay higher rates for life and health insurance.  Many life insurance policies are even written to pay higher rates if someone dies in a car accident while wearing their seatbelt.  Why?  Because the statisticians that work at insurance companies want to promote the safest, healthiest habits from their participants.  Those who fail to comply pay higher rates.

To the people that say that you’re better off to use a positive reward to promote desired behavior than negative reinforcement, I’ll point back to smoking.  Why are taxes on a pack of cigarettes so high these days?  For many state governments needing more revenue, they will propose further increasing the taxes on cigarettes.  Smokers sure squawk about this, but the public at large doesn’t seem to mind.  I think its safe to say that smokers are being punished by being asked to pay ever increasing taxes on a product they say the need.  Non-smokers couldn’t care less though, because a) the taxes don’t affect them, and b) they view cigarettes as a public health nuisance.  Many cities have even started pushing the simple act of smoking out of public places because of the risk it poses.

I think we have to admit that the spiraling rate of obesity is a public health nuisance, and by some accounts, substantially increases healthcare costs for the public at large.  Given that fact, it wouldn’t surprise me to see this trend growing, as providers seek to contain healthcare costs, and force participants to move in a direction that favors prevention.  So, what do you think?  Is it fair for people who are obese to pay higher rates for health insurance than those who aren’t?  Let’s talk about his.

If you enjoyed this post, make sure you subscribe to my RSS feed!