The Journal of the American Medical Association recently published a study purporting to link increased soda consumption with weight gain. This comes on the heels of studies linking obesity to urban sprawl, longer commutes to work, time in front of the television, time on the Internet, not enough physical education in schools, vending machines in schools, marketing and advertising of junk food to children, and countless other trends, foods, habits and [in]activities.
Unfortunately, a slew of nutrition activists and nanny-statists want to use the fact some Americans are getting bigger to limit what the rest of us can eat. So we’re seeing lawsuits against food companies, calls for “fat taxes” on calorie-dense eatables, and moves to restrict advertising and marketing of junk food.
We oppose these measures, and prefer that people be free to make their own decisions about diet and lifestyle and also bear the consequences of those decisions.
But there are things we can do about health insurance that could increase personal responsibility and harness the free-market power to encourage good decisions on diet and activity.
There are legal barriers against health insurers assigning risk in premiums as is done with auto and life insurance premiums. Many states require that health insurers charge the same premiums for any member of a group health plan, regardless of risk. This means the costs of the donuts-and-pizza couch potato’s unhealthy decisions are imposed on the gym rat who diets carefully and watches his cholesterol.
Removing these barriers would encourage health insurers to begin experimenting with carrot-and-stick approaches to healthy lifestyles. One company might give premium discounts for gym memberships, for example. Another might foot the bill for nutritional counseling. In short, health insurers would compete with each other to contrive a system that best balances the consumer health and self-interest.
At an obesity summit last June, Health and Human Service Secretary Tommy Thompson said there are no federal restrictions on so-called “medical underwriting.” His counsel’s office has confirmed there are neither federal laws against it nor binding court decisions or federal regulations.
Congress can help eliminate state laws that encourage unhealthy lifestyles by enacting legislation similar to the Health Care Choice Act, sponsored by Rep. John Shadegg, Arizona Republican. That bill would enable residents of any state to buy health insurance in any other state, under the laws and regulations of the state in which the insurer is incorporated. This would create a nationwide market for health insurance, as President Bush has suggested. Making the U.S. a “health insurance free trade zone” would let consumers avoid unhealthy regulation and encourage states with anachronistic health insurance regulations to deregulate or risk seeing health insurers reincorporate elsewhere.
A nationwide market for health insurance would spur competition to attract customers and would prompt competition among the states to attract health insurers. This would create 51 health-care “laboratories of democracy” to borrow a phrase from former Supreme Court Justice Louis Brandeis, with consumers benefiting from two tiers of competition.
Of course, Congress has already moved toward encouraging healthier lifestyles by increasing access to health- savings accounts. Health-savings accounts give consumers the money their insurance companies would otherwise control. Whatever the insured doesn’t spend stays in his account and grows tax-free. Bringing the costs of unhealthy lifestyles closer to consumers encourages more careful attention to lifestyle choices. If a consumer knows any money not spent on health care can be rolled over into a retirement account, he is likelier to make healthier lifestyle decisions.
A nationwide market for health insurance would go a long way toward restricting the obesity problem to the obese, instead of subsidizing it by spreading the costs of weight gain over the entire population. Most importantly, it would harness market power and competition to find the most effective way to encourage healthy lifestyles. Health insurance and health-care providers could provide incentives to choose those lifestyles.
It certainly won’t guarantee an end to obesity, but it definitely would be preferable to policies that encourage irresponsibility and restrict choice for everyone.
Michael Cannon is director of health policy studies and Radley Balko is a policy analyst with the Cato Institute.
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