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Should We Make Health Insurance More Like Car Insurance?

The health insurance issue is going to come front and center in the next few days, once everyone stops twittering about Iran and notices that the...


The health insurance issue is going to come front and center in the next few days, once everyone stops twittering about Iran and notices that the Senate is really hunkering down to attempt to overhaul how health insurance works in this country. One of the main issues is the cost of providing health care, which is enormous, and will cost the government trillions of dollars they don't have if they decide they are going to provide us all with health care.Facing that predicament, lots of people are talking about how to reduce our health care costs. A great one was written about yesterday in the Wall Street Journal (via Kottke). At Safeway, using an innovative new system that correlates employee behavior with insurance premiums, they have kept their costs flat over the last four years, despite the national average for companies increasing by 38 percent.How does it work? Simple. Be healthy. Pay less. Like car insurance, the amount you pay goes up if you do bad things. Get a speeding ticket, your car insurance goes up. Start smoking, your Safeway health insurance costs go up. This is because Safeway realized that nearly all their health care costs were from a small group of diseases (cardiovascular disease, cancer, diabetes and obesity), and that, in large part, these diseases can be easily mitigated or even prevented by simple changes in lifestyle.So, all Safeway employees are tested annually for tobacco usage, healthy weight, blood pressure, and cholesterol levels. The healthier you are, the less you pay, and your health is the sole determinant in your premium costs. This is in stark contrast to how most health insurance works, where everyone pays the same amount, and if you are a fat smoker with bad cholesterol and go to the hospital 20 times a year, the healthy non-smoker who gets into a freak accident and has to go to the hospital for the first time in 10 years has to subsidize the costs of all your visits.This is also a perfect free-market approach to getting all of America healthier. Fitting into a bathing suit might be motivation for some, but getting more money in your wallet while shedding pounds would probably motivate a lot more people.What do you think? Would you sign up for health insurance that got cheaper as you got healthier?
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