Higher health insurance premiums for those deemed ‘at risk’ entrenches inequality. By Sophie Lewis.

Sophie Lewis
Making health insurance discriminatory

Since the release of the Commission of Audit report there has been debate about whether people who make unhealthy lifestyle choices should pay higher premiums for health insurance. The justification is that the responsibility for the health costs associated with unhealthy behaviours, for example, smoking and obesity, should be borne by the individual, and not by all those who choose to take up private health insurance.

In Australia, a community rating principle applies to health insurance. Under the Private Health Insurance Act 2007, health insurers are not allowed to discriminate on the basis of an individual’s health status, health choices or age. Unlike other kinds of insurance that offer different premiums to people on the basis of their individual risk, all Australians pay the same premium for private health insurance. Health insurers argue that increased premiums based on lifestyle will reward those who make healthy choices by reducing premiums and encourage people to make healthy choices. However, there are a number of concerns with initiatives that emphasise that people are responsible for their own poor health because of the voluntary choices that they make. 

While some people may benefit from being offered lower premiums, it will not be beneficial for health consumers in the long term. If health funds are allowed to discriminate on the basis of particular health risk factors such as weight or smoking status, such judgements could extend to other factors that increase a person’s health risk: for example, those with pre-existing health conditions, conditions for which the lifestyle risk is contentious, and even genetic factors.

Moving away from a community rating system means we will focus more on the individual, rather than the structural factors that contribute to poorer health. There is substantial evidence that lifestyle choices are socially patterned. Reports on the social determinants of health highlight the shortcomings of an increasing focus on personal responsibility for health. For example, in their submission to the Commission of Audit, the Public Health Association of Australia noted that the prevalence of diabetes is “better explained by where you live than behavioural risk factors such as smoking or exercise”.

Inequalities in health are a reflection of inequalities in our society such as income, education, unemployment, housing and social connectedness. Those with more social and financial resources enjoy more choice and better health than those who are more disadvantaged. People who are more socially disadvantaged are more likely to smoke, be overweight, and experience illness due to preventable health problems. They also have less access to health services.

The assumption that all Australians should be able to make rational, informed choices about their health is problematic. Our current research suggests that people’s capacity to make choices about their health is unequal. Although people do have an important role in minimising their health risks, their actions cannot be seen in isolation. There is clear evidence that smoking, eating and exercising behaviours are strongly influenced by our social, cultural and geographical environment. Many people who are overweight want to be healthy but find it extremely difficult to modify their weight due to a range of biological, environmental and social factors that limit their capacity to make healthy choices. These include access and affordability of healthy food options or facilities to engage in physical activity, increasing portion sizes, misleading or confusing food labelling and advertising, increasing work demands, longer working hours, and changes in family structure.

Asking people to take more personal responsibility for their health also assumes that people are able to make informed health choices. However, data from the Australian Bureau of Statistics shows that up to 60 per cent of Australian adults have low health literacy. This means that they do not have the skills or knowledge to access and use information and resources to improve their health.

The argument put forward by health insurers that the capacity to discriminate will be beneficial to health users and the healthcare system is not in line with current evidence. There is a lack of data to show that financial incentives lead to positive health outcomes. A review of the evidence commissioned by the National Health and Hospitals Reform Commission in 2008 found that financial incentives only work for simple one-off programs such as screening and immunisation. There is little to suggest these approaches are effective for more complex health issues, such as weight management, which require long-term sustained behavioural change or community-based initiatives. Research shows that when financial incentives are offered to encourage weight loss, people who receive incentives show no greater long-term improvements in health or weight outcomes than people who do not receive incentives.

Non-profit health organisations and advocacy groups are concerned that if taken up by the Australian government, these kinds of recommendations could penalise groups that, because of disadvantage, are less able to quit smoking or lose weight, but also have the greatest need for health resources.

Our healthcare system is underpinned by principles of fair and equal access to health services that give all Australians the opportunity for equal health outcomes. If we start penalising people for making the wrong lifestyle choices, it is likely to increase and further entrench health inequity in Australia.

A focus on individuals taking personal responsibility for their health also sends a message that we should blame people for poor health. It may encourage discrimination and isolation of already marginalised and vulnerable groups if those who have greater need for medical care and services are blamed for increasing healthcare costs. 

There are better ways to help people improve their health that don’t isolate or discriminate “at risk” individuals and groups. We should be investing in community-based preventive health programs that will support people to make informed and responsible choices for their health. These programs should recognise the need for sustained intervention to tackle complex health issues, and take into account when designing policies that people have different capacities to engage in healthy activities. There is a need to tackle issues in access to health services and health literacy if we are to encourage people to take responsibility for their wellbeing.

This article was first published in the print edition of The Saturday Paper on May 10, 2014 as "Unhealthy discrimination".

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Sophie Lewis is a postdoctoral public health researcher at the faculty of health sciences, the University of Sydney.

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