Should People With Unhealthy Lifestyles Pay Higher Health Insurance Premiums?

David R. Buchanan


J Prim Prev. 2011;32(1):17-21. 

In This Article

Ethical Justification for Different Rates

Dubois reviews three ethical grounds that have been used to justify charging unhealthy people more or charging healthy persons less. (Economists consider the respective approaches fungible, that is, equivalent and interchangeable, from a rational economic perspective.) The first is based on the principle of beneficence: Encouraging healthy behaviors reduces suffering, prevents social exclusion, promotes autonomy, and reduces the threat to social solidarity (in light of potential concerns about the "free-rider" problem, where someone is seen to benefit from a system without contributing a fair share). Dubois notes that this line of justification suffers from the familiar problems of paternalism, wherein the state/government or some third party (the insurance company) asserts that it knows what is in a person's best interests better than the person himself. Beneficence may not be sufficient to override the principle of respect for autonomy, which holds that people should decide for themselves how they want to live their lives (as long as it does not harm others, as discussed below).

Dubois devotes an entire section to challenging the claim of actuarial fairness, i.e., because it costs more to treat people who smoke, are overweight, are sedentary, and drink too much, it seems only fair that they should pay more for their coverage. Dubois argues that this position is empirically disputable, and if applied consistently, would raise thorny issues about similar issues, like genetic disorders, which most people would find ethically unacceptable (e.g., should a family with a child born with cerebral palsy be charged more, following the same logic of actuarial fairness?). In the US context, the question of actuarial fairness raises three points that deserve further discussion. First, there is an important distinction to be made between public and private insurance schemes. In a competitive market system, private insurance companies can offer differential plans, and in principle, potential buyers can decide whether they consider the contractual terms fair or not. The same is not true of government-run, single-payer plans, where the issue of discrimination against poor and minority people would be inescapable (because it is an empirically well-established fact that the health behaviors and indicators at stake are more prevalent in these groups). A variation of this concern arises with respect to the difference between employers who offer a number of insurance plan options versus those who offer only a single employer-funded plan. In the latter situation, the question of equal or differential plans should be an issue for bargaining, where the employees can decide how they want to represent their collective interests, as they deliberate about the relative weight that should be given to different ethical considerations. Finally, though there is increasingly convincing evidence that the total costs of treating people with unhealthy lifestyles over a lifetime is less than the total for healthy people (because unhealthy people die younger), it is equally clear that, on annual basis, unhealthy people use more medical services. This is relevant because, in the long-term, it would be in the financial interests of the collective insurance industry to ignore unhealthy behaviors because such behaviors would eventually save them money. However, due to relatively high turnover in employment and changes in health insurance plans in the US, individual companies cannot bank on these potential savings, and hence, they see it in their interests to promote differentiated plans to attain short-term savings. That said, the idea that charging people more can be ethically justified strictly on the basis of financial calculations appears thin, unappealing, and unconvincing to most people, as it seems to diminish the value of mutual caring and commitment to a cold cash nexus.

The third grounds that Dubois discusses as justification for charging people with unhealthy lifestyles more is founded on an implicit social contract. Dubois makes surprisingly short shrift of this approach, devoting only a single paragraph to this line of reasoning, and he casts it largely in terms of individual responsibility to make productive contributions to society or "cooperative schemes" (about which he suggests that insurance schemes may or may not qualify). Dubois quickly dismisses these grounds, asserting that such arguments would require a more comprehensive theory of justice or the good society to be tenable. It may perhaps be because he is writing from a European perspective, where Rawls (1971) may not have as much influence, but I think that it is precisely in terms of a social contract that most Americans are struggling to make sense of this issue. They argue about it in terms of a powerful tension between a sense of reciprocity and mutual obligation versus sympathy and understanding about the degree to which individual health status is beyond one's personal control. People want to believe that they can and do exercise some degree of control over their own health. At the same time, it is a rare person who is not cognizant of the fragility of the human condition and the capriciousness of being stricken by disease. Given that there will never be enough money to pay for all possible medical procedures for everyone (the US already pays 2–3 times the percentage of its gross national product for health care expenditures as other industrialized nations, with little to show for it), it is imperative to use limited resources fairly. The major challenge then is coming to terms with how much individuals should be held accountable for exercising control over various health behaviors and how much weight should be given to the social determinants of health (where poor health can be explained as the result of brute bad luck due to circumstances of birth, which a just society should strive to rectify). In addition, as Rawls reminds us, finding an appropriate balance needs to be tempered with justice considerations that give precedence to concern for those who are least well off.