It was only a matter of time before the perfect storm hit state employee healthcare. It happened this week, on August 20, in, of all places, Alabama.
By 2011, Alabama employees who are obese, hypertensive, or have high cholesterol or high blood glucose will have to pay $25 more each month for their state health insurance. In 2010, they’ll pay $25 more if they haven’t enrolled in wellness programs to address their health risks.
Alabama has 37,555 active state agency employees covered by the State Employee Insurance Board. In the last ten years state health care costs for these workers have risen 172%. As yet untouched by the new rules are the 222,445 active duty and retired teachers covered by a separate system – the Public Education Employees Health Insurance Plan, but one suspects their time will come. After all, their health care costs have risen 200% in the same period.
To put this in perspective, consider this. Since 1999, Alabama health care and pension costs for all employees, including active and retired teachers, have risen 241%. But state revenues have risen only 67%. When one factors into the mix that:
- Only two states in the nation have more overweight people than Alabama, and that
- 43% of Alabama’s state employees are overweight, and that
- 19% are extremely overweight with body mass index greater than 35, and that
- Medical costs for the extremely overweight are $1,700 a year higher than for employees of normal weight (body mass index less than 25), and that
- Current economic indicators do not suggest a rapid rise in state revenues over the next few years, but that
- Health care annual costs are expected to continue increasing at double digit rates, then
- It doesn’t take much of a genius to conclude that as time goes by the situation becomes more and more untenable, hence,
- The unveiling and rapid descent of the economic Hammer of Thor.
You may ask why smokers are not included. Well, they are. Alabama employees who smoke are already charged an extra $22 per month for their health insurance.
Notwithstanding that, obesity is the big killer. As I wrote in a monograph on The Best Health Care in the World that debuted here in the Insider as a 5-part series in March of this year:
Unfortunately, obesity has been shown to be a greater driver of health care and health care spending than alcohol consumption or smoking – “the effects of obesity are similar to 20 years of aging.” According to Thorpe, et al, 27% of the per capita increase in US health care spending between 1987 and 2001 was attributable to obesity. There is a direct correlation between obesity and Type 2 diabetes, obesity and hypertension and obesity and heart disease (the trends in obesity accounted for more than 38% of the increase of diabetes spending and more than 41% of the increase in spending on heart disease since 1987).
It is as yet unknown whether Alabama will assist its 7,100 extremely overweight employees currently at risk for the higher health insurance charges by defraying some or all of the cost of the wellness programs toward which it is now herding them. Also unknown is if and when this surcharge program will be extended to all those teachers, who now pay $134 per month for their share of family coverage, compared to a nationwide average of $273 per month according to a survey by The Kaiser Family Foundation and The Health Research an Educational Trust.
Although one can hardly say that Alabama is noted for leading the national way, one has to ask, “As Alabama goes, can the nation be far behind?”
Tags: Alabama, healthcare, insurance, obesity
