Is it Really a "Fat Tax"?

A couple of days after I put up my last post on this blog, one of my work colleagues circulated a link to this Fox News article about the proposed change to Alabama's state-employee health insurance plan that could require certain obese employees to pay more for their coverage.

I have to admit, there's something catchy about the concept of a "fat tax," especially if it's associated with the state that ranked #2 in obesity prevalence in 2007. But are Fox News and scads of other commentators using this term accurately describing what's being proposed?

Well, let's take a look at the actual proposal by the Alabama State Employee Insurance Board.

• What they (the state) say they are doing is charging (for the first time,apparently) for health insurance-- to the tune of $25/month, beginning 1/1/10.
• At the same time, they're offering a $25/month "wellness premium discount." What do employees have to do to get the discount? Submit baseline readings for blood pressure, cholesterol, glucose, and BMI. Employees have until 11/30/09 to submit the baseline data. They can do so either through participating in a state screening program or they can get their own physician to certify the info.
• Starting in 2011, employees deemed not at risk based on baseline data (remember, this includes blood pressure, cholesterol, and glucose as well as BMI) continue to receive the credit. Those deemed at risk can also continue to get the credit if they do one of three things: (1) get their physician to state that they've been counseled (that's all; nothing about treatment) regarding their health risk factor or else has a medical condition preventing them from improving the health risk factor (whatever that means); (2) "participated [in] and/or completed" a state-approved wellness program (the "and/or" is key); (3) "reported acceptable improvement in the health risk factor(s)" (whatever that means).
• Not sure exactly what's meant by this statement: "At risk employees are eligible for a physician referral waiving the copay." I haven't researched plan details, but I'm guessing that (a) employees always (or at least for several years now) have had a copay (even though they haven't had to pay premiums), and (b) this traditional copay is going to be waived for at-risk employees, to remove a dis-incentive for receiving care

Bottom line, this seems to be a fairly benign and not totally unreasonable proposal. And in fact, that's how some news coverage-- see Birmighmam News here or Wall Street Journal here-- has presented it. Using the term "Fat Tax" may make for spectacular headlines, but it doesn't really help us make sober assessments of programs based on the merits.