Colo. bill allows insurance discounts for health improvement
The Denver Post
A proposed state law that allows health insurance discounts for improvements such as losing weight or cutting cholesterol could lead to a system where co-workers with the same coverage pay different premiums based on their health.
Health insurance companies in Colorado are now allowed to reward people for participating in wellness or smoking-cessation programs, but the new legislation takes that a step further. Discounts could come with improved health.
“People respond to incentives,” said Rep. Joe Rice, a Littleton Democrat sponsoring the bill up for debate at the Capitol. “When people start doing something they weren’t before . . . like walk 100 miles . . . it becomes kind of a habit and a culture and a thought.”
The legislation, House Bill 1160, would affect small businesses – those with 50 employees or fewer – and people who buy insurance individually. Large companies already can offer such incentive-based discounts under federal law.
The legislation initially riled advocates for people with disabilities, including mental illness and multiple sclerosis, because they feared those people would lose out on discounts.
An amendment to the proposal says that if people with disabilities – weak hearts, bad backs or other issues – give their insurance company a doctor’s note explaining they can’t participate, they can receive the same discount as other employees.
“Nobody is penalized,” Rice said.
Incentive programs allowed under the legislation could look something like the one Rocky Mountain Health Plans uses with its own 500 employees.
Workers in the program are tested annually for glucose and cholesterol levels, blood pressure and tobacco use, then given a health-assessment score based on how likely they are to develop diabetes or heart disease.
Those who receive a score of at least 71 out of 100 get a discount on their premium.
Employees who improve their score by at least five points from one year to the next also receive a discount. The maximum discount allowed by law is 20 percent.
Quitting smoking is worth 25 points.
“By using measurable results, you have a much higher motivation on the part of participants to actually commit themselves to adopting healthy lifestyles,” said Neil Waldron, Rocky Mountain Health Plans’ chief marketing officer.
It makes a huge difference to tie rewards to health improvement, not just participation, he said. Otherwise, “you take a health-risk assessment and you go home and eat a bag of potato chips,” Waldron said.
Three years into the program, the number of Rocky Mountain Health Plans employees identified as having high disease risk has dropped significantly, Waldron said.
Supporters of the legislation say it could end up lowering insurance costs for small businesses in Colorado as their workers achieve better health.
Critics of the proposal are skeptical.
“It sounds wonderful and I believe in wellness, but once again I’m cynical enough to assume it’s going to be in the best interest of insurance companies, ultimately,” said Sen. Joyce Foster, a Denver Democrat who was one of two senators who voted against the bill when it passed out of committee last week.
Foster worries that insurance companies would offer such incentive programs only to businesses with healthy, young employees.
There are also concerns about peer pressure in small offices – say, a smoker or overweight person chose not to sign up – and about privacy if a worker with depression or a heart problem had to produce a doctor’s note explaining why he couldn’t participate, Foster said.
Mental Health America of Colorado initially was against the bill, concerned that such incentive programs would slight people with mental illness.
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