The final step to end healthcare inequality

Consumers are rewarded for good behavior in many sectors of our economy. Keep your furnace filters clean and your house well-insulated, and you may get a discount from your electric or gas company. Stay accident- free, or have children who are good students, your auto insurer gives you a discount. 

On the other side of the coin, there’s health insurance. If you buy your own health insurance, and take steps to improve your health, there are no discounts.  In fact, it’s against the law in most instances for insurers to provide wellness incentives for individuals who pay for their own health insurance.  

{mosads}However it’s perfectly legal — and in fact encouraged under the Affordable Care Act— for employers to reward employees for behaviors that lead to better health. Insurance companies can give a company up to a 30 percent price break on its group insurance based on health improvements made by its employees. Up to 50 percent is allowed for tobacco cessation programs. 

But if you are your own boss, the rules are different.   

Under the Affordable Care Act (ACA), every American who pays for their own insurance is charged the same price, varying only by age, geography, family size, and tobacco status. These rules make it illegal for insurance companies to charge sick people more than healthy people. Most would say, great!   

But there’s also a downside in not allowing rewards or discounts to be offered to consumers in the individual market who take measurable steps to improve their health AFTER enrolling in a health insurance plan.  Now that more than 11 million Americans have purchased their own plans, the best way to bend the curve of rising healthcare costs is to engage consumers in maintaining and improving their own health. And nothing will get their attention more than the opportunity to save money for taking specific action to prevent illness and stay well. 

Insurance companies should be allowed to offer discounts to customers for things like lowering blood pressure, adhering to diabetes management protocols, or reducing body mass — things that are broadly agreed by health experts to reduce health costs and to improve health. Today, premiums only go down if you quit smoking. But why should smoking cessation be the only health improvement subject to a premium savings? 

This is not to suggest a return to underwriting at the time of application based on health status or discounts based on a ‘claims free’ status.  Unexpected medical claims can happen to anyone. People should not avoid medical treatment just to keep their health insurance premiums artificially lower. 

Now that millions of Americans have gained access to health insurance coverage, and as millions more begin to pay for their own plans in years to come, health insurers should be encouraged to create economic incentives for their customers to maintain health coverage year-after-year, and reward them for taking measurable, defined and verifiable steps to improve their health. 

Doing so is good for consumers, and it’s good business. According to the 2013 RAND Employer Survey, 78 percent of employers stated their wellness programs decreased absenteeism and 80% stated that it increased productivity. Sixty percent indicated wellness programs reduced health care costs for their firms. Disease management wellness programs offer the most significant reduction in health care costs, with one case study pegging savings at $136 per member per month, driven by a 29 percent reduction in hospital admissions. 

It would be a boon for health insurers. They could compete for customers not just on price or provider network, but on the incentives they offer for taking steps to improve long-term health. 

Consumers are smart. Given good information, in an open environment, and real rewards for good behavior, and they will make great decisions. They do so every day in many other industries. They will in health insurance.  

If an owner with a 1,000 employees can profit by improving the health of her workers, why shouldn’t the single mom who buys her own insurance get a reward for taking steps to improve the health of her children?    

Rewards for good behavior resonates with both Democrats and Republicans. It is time for a healthy discussion in Congress about healthy discounts. 

Smedsrud is co-founder and chief executive officer of HealthCare.com. White is president of the Council for Affordable Health Coverage.