The Wall Street Journal calls it the “Medicaid Fat Fee,” Time magazine refers to “Arizona’s Flab Tax” while Arizona’s top health officials say a proposed penalty that would be levied on certain Medicaid recipients “is a way to reward good behavior”—a stick without the carrot approach.
At issue is the latest plan to help Arizona make up for its $1.15 billion budget shortfall and planned 28% cut to the state’s Medicaid program. The idea is to require certain childless adults—those who are obese and fail to follow a doctor-ordered weight-loss plan; those who are chronically ill with a condition like diabetes and don’t adhere to recommended treatment; and smokers—to pay a $50 surcharge.
If instituted, the plan is projected to add about $500 million to fill the budget deficit. It would also signal the first attempt ever to penalize Medicaid recipients for what the state deems “unhealthy behaviors” that drive up health care costs. “If you want to smoke, go for it,” said Monica Coury, spokeswoman for Arizona's Medicaid program. “But understand you're going to have to contribute something for the cost of the care of your smoking.”
Despite support from Gov. Jan Brewer and the GOP-heavy Arizona state legislature, the proposed “fat tax” has its detractors, especially among advocates for the poor. In an interview on Southern California Public Radio (SCPR), Arthur Caplan, Director of the Center for Bioethics at the University of Pennsylvania said of the plan “I don’t think it’s fair, I think it’s a bad idea.” Caplan says singling out the “poorest of the poor,” (in Arizona we’re talking about a family of two earning under $15,000/yr) is “regressive, short-sighted and cruel… It’s just easy to pick on the poor who do stigmatized things.”
Arizona, like many states, finds itself in a Medicaid crisis. As unemployment rates rise and more people lose their private coverage, the joint state-federal program has seen an increase in enrollees. The cost of care continues to rise and many state Medicaid programs are riddled with fraud, waste and poorly-coordinated care. Providers are often difficult to find—especially the primary care doctors who would be enlisted to oversee obesity and smoking cessation programs as well as care for the chronically-ill.
In January, Governor Brewer suspended Medicaid coverage for organ transplants (stranding nearly 100 patients on the transplant waiting list) and faced national criticism for that and other actions—including dropping coverage for 350,000 single adults and freezing enrollment in KidsCare, the state’s CHIP. In April, a new budget signed by Brewer restored Medicaid coverage for most organ transplants. And if the surcharges go into effect, Brewer claims that 135,000 of the single adults kicked off Medicaid rolls can be reinstated.
But is taxing the “poorest of poor” the only way to rescue Medicaid in Arizona? There are many problems with this plan, first and foremost it has not been fleshed out enough to answer some vexing questions. For example; Why not fine people who practice other unhealthy behaviors like not wearing sunscreen or drinking too much alcohol? Who will decide if chronically-ill patients are adhering to treatment? What criteria will the government use to decide who is obese and not following doctor’s weight-loss advice?
In Arizona, 25.5% of residents were obese as of 2009, according to figures from the federal Centers for Disease Control and Prevention. There are no figures for what percentage of Medicaid recipients in the state are obese, but other data from the CDC has shown, for example, that nationally 42.0% of women with income below 130% of the poverty level are obese (vs. 29% of women with incomes above 350% of the poverty line). Poor people are more likely to consume foods that are high in calories as well as sugar, fat and salt because they are cheaper than whole grains, vegetables and more healthy choices. The point is that in this country, obesity is paradoxically a symptom of poverty, not easily solved by taxing those who are poor and overweight and have little access to healthy foods and diet doctors.
Smoking is another behavior associated with being poor. About 46% of Arizona's Medicaid recipients smoke daily, according to a 2006 state survey. The stress of poverty is surely an important reason for this high smoking rate, but as health disparities research points out, the poor also have little access to smoking cessation programs. And perversely, Caplan adds, smokers don’t actually cost Medicaid more in health care costs in the long run because they die younger, before they require extended treatment for dementia and other diseases of old age. Taxing tobacco products would generate more income for the state and the associated price increase acts as a far greater deterrent to smoking.
Finally, taxing the chronically-ill for not maintaining recommended treatments seems the meanest cut of all. Many of these Medicaid recipients are unable to afford all their prescribed medications; they have trouble finding doctors who will care for them or see them at regular intervals, and many suffer from chronic and under-treated mental health problems. To me it seems like kicking a man (or woman) when he’s already down to fine a diabetic, say, who also suffers from depression and intermittent homelessness.
Conservatives like Michael Tanner, a senior fellow at the Cato Institute, say that Arizona’s proposal to punish Medicaid enrollees for unhealthy behaviors is likely to be adopted by other states. “I see absolutely nothing wrong with people taking responsibility for the choices they make,” he told SCPR. Alternatives that include taxing junk food, banning toys from fast-food “Happy Meals,” and eliminating “food deserts” in poor neighborhoods are methods that expand what Tanner calls “the Nanny state,” rather than fostering the all-important virtue of personal responsibility.
Decades of research show the link between poverty and poor health—cheap food is unhealthy food; stress leads to unhealthful behaviors like smoking; and rates of poorly controlled diabetes, hypertension and serious mental health problems are far higher among the disadvantaged. Will using fines to encourage dieting, smoking cessation and better disease management do anything than further punish the poor for deeply-seated social problems? I think not.
Under Brewer’s leadership, Arizona has instituted a number of controversial and stilted policies that single out the vulnerable groups in that state; immigrants, the poor and even children. Perhaps this is out of fiscal desperation. But the latest move on Medicaid is as Caplan says, unfair, cruel and short-sighted. Health care costs are out of control because Medicaid rolls are rising, prices for drugs, hospitalization and medical procedures continue to grow unchecked, and waste, fraud and over-treatment remain largely unaddressed. “We have a broken system that’s gouging us on prices and we’re talking about taxing the poorest of the poor to pay for it,” says Caplan. This is a policy that should end in Arizona before it becomes a strategy embraced by other struggling states.
Hello Naomi,
Excellent overview here. I suspect we’ll see more of these punitive “surcharges” that address what are considered to be self-inflicted medical problems.
One wonders, however, if Arizona also plans to take aim at those who need orthopedic surgery?
A few years ago, the Journal of Medical Ethics, for example, recently ran an interesting observation by Dr. Søren Holm about a U.K. entity called NICE (The National Insitutute for Health and Clinical Excellence) and its controversial dilemma at the time: whether health care resources should be invested in those whose conditions were considered to be self-inflicted. But Dr. Holm argued:
“Participating in a number of sports and leisure pursuits, even at amateur levels, increases your risk of sustaining significant ankle or knee ligament damage, requiring surgical reconstruction. This is also true of alpine skiing, squash playing, soccer, and many other sports.
“Should we now expect guidance to orthopedic surgeons that they are only to reconstruct sports-induced ligament injuries if the patient promises NEVER to play that sport again?“
More on this at: “Heart Attack: Did You Bring This On Yourself?” at http://myheartsisters.org/2009/11/14/bring-this-on-yourself/
Silly argument by Dr. Holm. The same patients that are more active are less likely to use other resources and have conditions such as heart disease or diabetes. If one promises to never play a sport again you won’t need to fix their ACL in the first place, so you save even more. That is until you have to pay for the CABG they are more likely to need though.
Americans, liberals in particular are firmly on record about using the tax system to encourage or discourage behaviors that they don’t like or want to encourage (carbon tax, mileage tax, etc.). Naomi, you are totally on board with the tobacco tax. It’s the same thing. It disproportionally affects the poor. This like the “fat tax” is using the tax system to encourage beneficial and discourage detrimental activity. If Mr. Caplan wants to be consistent he needs to advocate for the repeal of all tobacco taxes as well.
Conservatives like to use the biblical analogy of teaching a man to fish, rather than giving him the fish.
“Give a man a fish, and he eats for a day,” goes the saying. “Teach a man to fish, and he eats for a lifetime.”
Here’s the problem: if he can’t afford to buy a fishing pole, net, or bait all the knowledge in the world won’t help him catch a fish. It’s hard to do with your bare hands.
If we tell the poor, “Eat responsibly or we’ll fine you $50 (which they probably don’t have) or disenroll you from Medicaid”, and then turn around and don’t make healthy foods available, or make UNhealthy foods cheaper and more easily available due to our public policies, then we really should not be surprised when the poor say to hell with fishing.
Maybe if they weren’t being taxed so much for cigarettes they could afford the $50 or they could afford healthier foods or even a fishing pole. If they are going to buy cigarettes anyway or it affects the poor to a greater degree, what is being gained by making the poor poorer? A tobacco tax or fat tax, It’s the same thing, both are attempting a change in behavior. If you are OK with one, but not the other, you aren’t being consistent.
Sorry, Jenga. I don’t buy your argument.
The so called “fat tax”, though disingenuous, is at least on its face an attempt to convince people to adopt healthier lifestyles. The problem with it, is it requires people to do so without giving them the tools they need to do so.
The tobacco tax, OTOH, recognizes that smoking is inherently unhealthy. Since a lot of my tax dollars go towards treating smoking related illnesses, I have no moral qualms about taxing the hell out of it.
And in their base, tobacco AND alcohol taxes have been a source of revenue for the government from the colonial period.
Since smoking rates tend to drop when tobacco taxes are raised, I would argue high cigarette taxes actually help the poor rather than harm them.
I don’t buy the inconsistency in yours. Tobacco taxes don’t give the poor tools to change their behavior other than make it more expensive and make them poorer. My tax dollars go to taking care of obesity related illness same as tobacco, both inherently unhealthy. If both are unhealthy choices, there should be no moral qualms about discouraging either. If you tax the hell out of being fat, you might get less of it as well. I want consistency in an argument, that’s what is missing here.
Panacea,Jenga
First of all, there is overwhelming scientific evidence that cigarettes and other tobacco products are dangerous and in my opinion should really be taken off the market as other dangerous consumer products have been. Taxing tobacco and strengthening anti-smoking laws effects all smokers (and curtails the practice), no matter their income level, and brings in needed revenue for state budgets. Perhaps some of that should be directed (as the original tobacco settlement money was)to anti-smoking efforts and cessation programs. Singling out Medicaid recipients for consuming a legal and heavily promoted product is just unfair.
As for obesity, it is a complicated medical problem with a variety of causes–including some that are less straight-forward than merely eating too much. Many medications cause weight gain, disability can lead to obesity and as I discussed in the post, it’s a lot cheaper to buy three boxes of mac and cheese, potatoes and junk food than purchase ingredients for a salad and poached salmon dinner.
The current economics of nutrition leave poor people at a severe disadvantage–making them pay for being obese without offering alternatives makes no sense. There are plenty of fat Americans (2/3 of the population is overweight)who are not covered by Medicaid and are not forced to pay a fine for their corpulence.
So, Jenga, I do support taxing cigarettes and junk food (artificial tanning too) so that the price of these products better represents their deleterious effects on everyone’s health and associated costs. I just can’t see the logic of singling out one vulnerable portion of society to meet stringent standards of healthy behavior when social determinants often make it so difficult to achieve them.
Carolyn,
Thanks for the reference to the NICE dilemma–it is a good illustration of the slippery slope we head down when we start penalizing people for certain behaviors that are linked to injury or disease.
It is important I think to recognize that obesity is a disease which we do not know how to cure.
I have written about this in the past on HealthBeaet.
If an obese person diets and exercises under a doctors supervision,and is completely compliant, 98% of those who lose weight will put it back on (even if still under a doctor’s supervision.)
Imagine how heartbreaking this is.
See my two-part post here:
http://www.healthbeatblog.org/2008/11/fat-what-the-ex.html
and here http://www.healthbeatblog.org/2008/11/fat-part-2-understanding
-obesity-for-hope-.html
In the post, I discuss an excellent documentary titled “FAT” directed by Andy Fredericks (you can rent it.)
He interviews doctors who have spent their careers studying obestity.
What we know at this point is that it is an extremely complicated disease involving genetic factors and little-understood signals from brain to stomach, body chemistry, etc.
We dont’ understand the causes and have no drugs or diets to cure it.
This is why at extremes, doctors advise bariatric surgery– a risky last resort.
Anyone who thinks that obese people can lose weight by eating less and exercising simply knows nothing about the disesase.
(Sure, many peole who need to lose 20 pounds can lose weight by changing diet and exercising– but that is not obesity. Being overweight are two different things.)
So instead of blaming the obese for being obese I suggest viewing the film– an easy way to learn about the research. (The film is poignant, funny, sad, very well cast and very well directed. You will enjoy it.)
Then if you’re really interested, follow up by googling the names of somem of the doctors who appear in the film, and you’ll learn more.
“I do support taxing cigarettes and junk food (artificial tanning too) so that the price of these products better represents their deleterious effects on everyone’s health and associated costs.”
This is my preferred approach as well. Economists call it full social costing. If we’re interested in efficient resource allocation, which I am, then the price of all products and services should reflect the full cost of producing them including all associated social costs.
Michael Tanner made the choice to be a conservative ‘fellow’ at the Cato Institute and he’s making sure he’ll never have to say he’s sorry. Because he loves his job — it’s a wonderful feeling knowing that other people’s decisions are so bad that you get to think up the ‘public policies’ to punish them while at the same time cutting the budget. Not to mention, your ‘policy’ is premised on every behavior being a conscious and considered decision so you get to proclaim that their devils let you do it — for the country’s greater good, of course. And afterwards, you and your cronies can go have a few cocktails together to celebrate your superior decision-making abilities.
Jenga said, “I don’t buy the inconsistency in yours.”
That’s because there’s no inconsistency. You’re using an apples vs oranges argument. Government doesn’t tax tobacco to promote health, they do it for revenue generation and always have. Anti-smoking advocates have used that fact to take advantage of the fact that smoking rates drop when prices go up.
Taxing someone for obesity, OTOH, is not designed to generate revenue nor is it intended to promote health . . . not really. It is a disingenuous attempt to cut Medicaid rolls for the poor, thus “saving” money. It really isn’t intended to change behavior as you and its promoters claim.
I’m fine with tobacco taxes because they are known to work. I’m not fine with a fat tax because there is no evidence it will work, and in fact it is not likely to.
Naomi:
I agree completely with your assessment of tobacco. It SHOULD be taken off the market. Unfortunately, the “anti-Nanny State” crowd will fight to the death to protect our right to kill ourselves, poison those around us, and bankrupt the health care system while they’re at it.
Taking tobacco off the market sounds great, but in practice won’t work. We’ll just create a black market in tobacco products much as we did with alcohol during Prohibition. Keeping it legal, and making it as expensive as possible works far, far better.
Your and Maggies comments on obesity being a disease hits the nail on the head, and that’s what the politicians and general public don’t want to believe. They don’t want to accept it is a disease; they’d much rather see it as a weakness of character and blame the individual than hold food corporations accountable for what they sell or being proactive in efforts to fix the problem.
Worse: no one wants to take on the billion dollar “nutritional supplements” industry that laughs all the way to the bank selling snake oil to the obese and overweight hoping for a way to lose weight without making major lifestyle changes.
Eating less and exercising more IS the key to losing weight for many of us: but it’s the overall lifestyle, and must be a permanent lifestyle change in order for it to work, and most people can’t or won’t do that.
And there are those of us whom these simple efforts don’t work. As Maggie points out, we don’t know why. It is likely rooted in a survival mechanism built in our physiology, one that can’t adjust for the excessive surplus of calories available to us in our modern society. Punishing people for a simple fact of evolution is inherently unfair.
Deb: I love your comment on Mr. Tanner. Well said, madam. 🙂
“It is likely rooted in a survival mechanism built in our physiology, one that can’t adjust for the excessive surplus of calories available to us in our modern society. Punishing people for a simple fact of evolution is inherently unfair.”
I don’t buy it. Obesity (BMI >30) rates in Western Europe are in the 10%-15% range. In Japan and Korea, they’re 3%. In the U.S. they’re over 30% and the U.S. rate is itself significantly higher than it was 30-40 years ago. While genetics may play a role in obesity for some people, I doubt that it’s a large number.
Lifestyles have changed a lot in the U.S. over the years. Far fewer people now work at physically demanding jobs due to a combination of automation and globalization. Modern conveniences as simple as a TV remote control make it unnecessary to even get up off the couch to change the channel. Fast food restaurants are everywhere. They were comparatively rare when I was growing up in the 1950’s and early 1960’s. Indeed, McDonald’s wasn’t even founded until 1955.
I’ve seen plenty of people lose weight through diet and exercise and keep it off, at least for the most part. Irrespective of the merits of a fat tax, portraying the majority of obese people as helpless to do anything to improve their condition just doesn’t compute.
Barry–
Saying “I don’t buy it” just isn’t a rseponse.You need evidence.
As they say, everyone has a right to their own opinion but not to their own facts.
You seem to have ignored my comment on obesity and the reference to previous posts where I have written about what the medical research tells us about obesity. These are facts.
People who are obese cannot simply eat less, eat better and lose weight.
See the links in my comment, check out the facts, and then please come back and repsond to Naomi’s post.
People who we refer to as obese are a) poor and
b) carry an extra 75 pounds or more. Usually more.
You and I knwo people who are overweight, need to lose 30 pounds, and succesd in doing that. (They too, often put it back on.)
But these overweight Americans are not obese. They don’t cost the heath care system more than thin people. (Some recent reserach suggests that obessively thin peple may cost us more, but that’s a different story. )
Finally, truly obese people (many of whom are poor, as Naomi points out)
cost society less becuase they die much sooner, often of diseases that kill them quickly (heart attacks, strokes) as opposed to diseases that often need to be treated for mamy years and cost us most (Alzheimers, manny forms of Cancer,etc.)
Most people who delevop cancer are over 65; most who develop Alzherimer’s are over 75. Most obese people do not live that long.
Maggie –
I think it is important to define terms carefully. The common definition of obesity is a Body Mass Index ≥ 30. People with a BMI ≥ 40 (about 100 pounds overweight) are considered morbidly obese. In the U.S. about one-third of the population is obese by this definition while 5% is morbidly obese. Obesity rates are up materially just since 1994 as you can see from the map in this paper by Optum Health: http://www.optumhealth.com/content/File/White_Paper_Managed_Bariatric_Services.pdf The sharp increase in obesity rates in the last 15-20 years cannot be attributed to any genetic changes in the population and, as I noted in my prior comment, obesity rates are far lower in Western Europe and Asia.
As for healthcare costs, the 65 and older population account for 33%-35% of costs in the U.S. which has remained pretty consistent for some time now. If we were doing a better job of keeping people healthier during their younger years, the percentage of medical costs attributable to the elderly should be rising but they aren’t. As obesity rates have risen in the last 20 years in the U.S. it has certainly contributed to the persistent increase in healthcare costs above and beyond the growth of the economy. I think a case can be made for taxing unhealthy food and drinks while perhaps subsidizing healthier foods. We could increase food stamp allowances to offset the tax for the poor but middle class and upper income people, many of whom are considerably overweight, should pay more for unhealthy food and maybe they will consume less of it to the benefit of their own health and the overall system’s costs.
Barry–
Yes you are right: being obese is different from simply being over-weight. Over-weight people lose weight all of the time. (Though they too find keeping it off for a matter of years very difficult.)Still, if they’re determined they have a solid shot at doing it.
Not so the truly obese.
You write:
“I think a case can be made for taxing unhealthy food and drinks while perhaps subsidizing healthier foods. We could increase food stamp allowances.”
I totally agree.
I would add that we should subsidize truly healthy breakfasts and lunches for children under a certain income level attending our public schools. They need more lean protein, fresh fruits and vegetables.
These foods are not cheap. But money we spend on keeping poor children healthy will pay back richly in terms of giving us a stronger work-force. (And of course, that’s just the pragmatic argument.)
As for obesity rates being lower in Asia and Western Eruope. . .
Obesity rates are indeed. lower in Asia. We think this is a combination of genetics (very immportant to obesity and part of why it is so difficult to combat, no matter how hard truly obese patients try) and the fact that in some Asian countries, food is so expensive that some people starve.
In the U.S., during the ‘1930s, some Americans starved to death. And, in general, during that period, poor Americans were thinner than they are today.
With the advent of McDonald’s, etc, industry learned how to make filling half-way good meals very cheaply, so that they coudl sell a meal for 99 cents. (This is all in the documentary FAT which is extremely interesting)
As a result, today, while many poor children don’t have enough to eat some days of the month, it is rare for anyone to starve to death. (Though many are malnourished.)
Anyway, that’s part of the reason obesity is not a big problem in Asia.
As for Europe, obesity varies widely by country (and even by regions within a country– compare Northern Italy to Southern Italy.) Different diets,and different gene pools.
If memory serves, Irish men are more prone to obesity than any other group. My guess is that alchohol combined with the genes and body chemsitry that lead to alchoholism have a lot to do with this. (When alcoholics stop drinking, many crave sugar. It seems to be tied up with what they are addicted to. Though alchohlism is another very complciated diseaset hat we don’t understand.
Doctors can really help people who are addicted to to tobacco. We have the drugs.
But when it comes to alcoholism and obesity, we don’t . . .
Some alcoholics are helped enormously by AA. I’m told that is as close as we have to a cure, and it doesn’t work for everyone. You have to believe in the philosophy .. . . Originally from Wiliam James. . .
That is pretty over the top, especially since the ones who would end up owing money are the already financially ill-equipped to take better care of themselves in the first place. Sigh, when are they going to get it right?
The Wall Street Journal calls it the Medicaid Fat Tax , Time magazine refers to Arizona’s Flab Tax while Arizona’s top health officials say a proposed penalty that would be levied on certain Medicaid recipients is a way to reward good behaviora stick without the carrot approach
These foods are not cheap. But money we spend on keeping poor children healthy will pay back richly in terms of giving us a stronger work-force. (And of course, that’s just the pragmatic argument.)
As for obesity rates being lower in Asia and Western Eruope.