Cigarette and doughnut

Cigarette and doughnut Credit: iStock

Should Medicaid beneficiaries who smoke have to pay extra for coverage? How about fat people? Both are doing unhealthy things that add to the burden on taxpayers, after all, so why not make them pay?

An intriguing proposal in Arizona illustrates the difficulties of going down this road, and the dilemmas involved in promoting health while reining in public spending -- goals that can be sharply at odds.

Smoking and obesity are the King Kong and Godzilla of public health. About 20 percent of American adults smoke (and even more did at one time), and tobacco causes a stunning one in five U.S. deaths. A third of American adults are obese, resulting in perhaps one in 10 deaths. Together, smoking and obesity probably cut short more than 600,000 lives annually.

Attacking these problems would seem a good way to improve health and reduce soaring medical costs. And people's smoking and eating are no longer wholly private matters because medical expenses now are mostly shared. Governments at all levels accounts for about half of health care spending, and the other half is mostly covered by private insurance. So we're all paying for one another.

In Arizona, half of those on Medicaid smoke and many are obese (the exact number isn't clear). So officials there plan to seek federal approval to charge obese or tobacco-using Medicaid recipients an extra $50 annually if they fail to meet specific health goals in conjunction with a doctor. This fee, which would only apply to able-bodied, childless adults, is aimed at saving the state money by discouraging costly behavior.

The approach is rare among states but becoming common in other settings. In Maricopa County, which contains Phoenix, public employees who smoke pay an extra $450 a year for health insurance. Private employers elsewhere have adopted similar tactics, using prizes, penalties and other incentives to discourage smoking and slim down workers. Some health insurers are also penalizing individuals for unhealthy habits -- or more palatably, offering "discounts" for those who live healthy.

People respond to incentives, so they're worth trying. But while most Medicaid programs pay for smoking cessation, few have much to offer the obese. And even if financial incentives change behavior, saving lives doesn't always mean saving money. Some studies show that getting people to stop smoking increases lifetime medical spending, because ex-smokers have more years to consume medical care. Arizona's plan might save the state money, but cost Uncle Sam more for Medicare -- and Social Security too, since ex-smokers are more likely to live long enough to collect.


Obesity, on the other hand, results in a lot of additional medical care without shortening life as much as smoking, so reducing obesity can save more money. But few Medicaid plans pay for weight-loss programs. Arizona, like New York, will pay for gastric bypass operations, but not weight-loss drugs or programs aside from physician visits.

It's time to reconsider that. Medicaid programs can save money and lives by figuring out what works to help the poor lose weight -- even a modest reduction pays big health dividends -- and then covering it. If people have the tools to change, then financial penalties and rewards are more likely to have the desired effect on behavior. This will be especially important as the upcoming Obama health care reforms expand insurance to millions more Americans in coming years, covering many of them at government expense.

Unless we can change the bad habits that lead to so much disease, we'll never control our medical spending, which far outpaces that of any other comparable nation. America is a world leader at reducing smoking thanks to decades of public education, cigarette taxes and limits on indoor puffing. That fight must continue, while the fight against obesity must be escalated. Our lives as well as our wallets depend upon it.