Picking Up the Tab for Medical Care: Who Should Pay?

Presidential candidate Mitt Romney's refusal to apologize for introducing state-mandated healthcare insurance while governor of Massachusetts may doom his chances to head the 2012 Republican party ticket. Moreover, the fractious issue is unlikely to go away since most Americans are (or will be) financially impacted by government-mandated medical insurance programs and policies.

A sputtering economy combined with healthcare costs that topped $2.5 trillion in 2009 (with further increases projected) will force presidential candidates along with ordinary citizens to face a hard question: who should pay for an individual's medical care? Are we our brother's keeper? Or is each of us on our own to fend for ourselves as best we can?

Is Adopting Healthful Habits Even Possible?

For many of us, the key to reducing medical costs is simply adopting a healthier lifestyle. About 70 percent of medical care costs can be attributed to unhealthy lifestyle choices (smoking, poor eating habits and lack of exercise). And we're passing on those bad habits to our offspring. One-third of American children are overweight or obese, and the health implications for their future are particularly grim!

Both for current and future generations, Americans must address the compelling question of who will foot the bill for rising medical costs. But even as we complain about mounting healthcare bills, Americans are reluctant to adopt healthier lifestyle habits to reduce costs.

The Widening Gap Between Personal and Financial Responsibility

A report by the Vitality Group, a provider of employer health and wellness programs, highlights the disconnect between personal responsibility for maintaining one's health and financial responsibility for medical consequences. While 82 percent of those surveyed felt they were personally responsible for the state of their health, only 44 percent felt they had a financial responsibility for the cost of medical care.

Over half of those surveyed felt that employers and the government should absorb the financial consequences of unhealthful lifestyle behaviors, rather than the individuals who engaged in the behaviors. Researchers also reported that the participants were reluctant to pay for wellness programs designed to teach healthful habits.

Pinpointing the disconnect between lifestyle choices and financial consequences provides useful insight for policymakers and employers seeking to reduce medical care costs. Even with the availability of sophisticated technological tools, social engineering is an imprecise mix of science and guesswork. Consequently, a variety of experiments are likely to be undertaken with the hope that one or more will be successful in reducing unhealthful lifestyle behaviors.

Social Experiments Underway

One example is the federal Patient Protection and Affordable Care Act of 2010, which requires fast-food and other chain restaurants to display calorie counts for the foods they sell. Whether this legislation will change behavior is questionable. Several professors at New York University who conducted a study of low-income communities after mandatory labeling took effect in New York City in 2008 concluded, "We did not find evidence that labeling influenced adolescent food choice or parental food choices for children in this population."

Some government jurisdictions have enacted bans on unhealthy food. California, New York City and Kings County, Washington, have banned trans fat, a form of fat that has been linked to heart disease. Illinois lawmakers are pondering a ban of their own.

In December, President Barack Obama signed the Healthy, Hunger-Free Kids Act into law, tying increased funding for school lunches to stricter health guidelines for the meals.

Does Taxing Unhealthful Behavior Work?

Another approach is taxing unhealthful behaviors. Alabama's fat tax falls in this category. Under the law, enacted this year, obese state workers have to pay $25 in insurance costs each month if they fail to reduce their weight.

Controversial legislation to impose a sales tax on sugary drinks and sodas was filed in 17 states from 2009 through 2010, according to the Rudd Center for Food Policy and Obesity at Yale University. Many experts consider sugary drinks the most significant factor in the rise of obesity. However, most of the proposed legislation was defeated.

Only Colorado and Washington successfully imposed a tax on soda; however, with many states facing budget shortfalls, the soft drink tax option might become more attractive and be placed once again on the legislative agenda.

New York's soda tax, prominently pushed by Governor David Patterson, is patterned after the successful antitobacco campaign. Researchers found a clear correlation between the increased cost of cigarettes and a reduction in the number of smokers. According to statistics cited by Drs. Tom Farley and Deborah Cohen in their book, Prescription for a Healthy Nation, every 10 percent price increase on cigarettes reduced sales by about three percent.

Whether smokers connected the cost of their behavior with the cost of treating smoking-related ailments was irrelevant. Some quit smoking because of the expense. Those who continued were forced to offset some of the medical costs associated with smoking. (Even so, a $7 tax would be required to fully cover the additional costs of medical care associated with smoking.)

Who Can Mandate Personal Accountability?

According to Art Carlos, chief executive officer of the Vitality Group, "The increasing need for health care arises from the treatment of illnesses and medical problems that are preventable through more healthful lifestyle choices. Despite advances in medicine, physicians cannot undo the damage resulting from long-term abuse of our bodies and are limited in their ability to reverse a lifetime of unhealthful habits. The solution will emerge when we are required to take personal accountability for the way we choose to live."

We spend twice as much as other industrialized nations for medical care, yet we are losing ground on the health front. In the near future, rising medical costs will force us to answer the hard questions: whose pockets are deep enough to cover the mounting medical care costs? Who will be our brother's keeper?