Filed Under:Health Insurance, Individual Health

California bill puts spotlight on wellness programs

What if anti-tobacco programs are more likely to penalize poor people? (CDC photo/Amanda Mills)
What if anti-tobacco programs are more likely to penalize poor people? (CDC photo/Amanda Mills)

The simmering battle over wellness programs is starting to boil over in California.

Members of the California Senate Health Committee recently voted 5-2 to pass Senate Bill 189, a bill that would put new restrictions on employer-sponsored wellness programs.

The bill, introduced by state Sen. Bill Monning, D-Carmel, would prohibit a wellness program from rewarding participants with a discount or rebate involving a premium, deductible, co-payment or coinsurance amount.

Any wellness program would have to be voluntary and offered to all similarly situated individuals, and a program could not base the receipt of a reward on a health status factor.

A wellness program could provide rewards based on an individual's membership in a fitness center, an individual's participation in a diagnostic testing program, or attendance at a periodic health education seminar, as long as the seminar "is not related to a particular health condition or health status factor."

Monning said RAND Corp. analysts found little evidence on whether wellness programs work or whether they lead to unintended outcomes, such as discrimination against employees "based on their health or health behaviors."

The bill would apply only to new wellness programs sold after the bill was enacted, not to wellness programs that were already in force.

 The provisions in the bill would expire in 2020.

The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) sparked a controversy about wellness programs by including a wellness program pricing provision in the rules restricting health carriers' ability to consider individuals' health status when setting rates. Under PPACA, carriers cannot consider individuals' health status when setting rates, but carriers can use incentives related to wellness programs to vary rates by as much as 50 percent.

Managers of the District of Columbia's PPACA health insurance exchange program recently decided to prohibit carriers from charging enrollees who use tobacco more for coverage.

D.C. exchange program managers noted that the American Cancer Association and the American Lung Association had opposed a tobacco-use surcharge, arguing that poor people are more likely than other people to use tobacco, and that a tobacco surcharge could make health insurance coverage unaffordable for the low-income people who most need health insurance and most need help from doctors with giving up tobacco.

In California, supporters of S.B. 189 have included the American Cancer Society Cancer Action Network and Consumers Union.

Opponents have included the Association of California Life and Health Insurance Companies, the California Association of Health Plans, the California Association of Health Underwriters, and general business groups, including the California Chamber of Commerce.

Dr. Sean Penwell, chief medical officer at SeeChange Health Insurance, a health insurer that promotes "value-based insurance design" (VBID) plans, has lobbied against S.B. 189.

RAND researchers found no evidence that wellness programs lead to discrimination, and they have found evidence that the programs can generate $3 in savings for every $1 invested, Penwell told lawmakers at a hearing, according to a written version of his testimony.

"SeeChange Health launched in California because we viewed the state as hospitable to innovation and committed to improving the health of its citizens," Penwell said.  "Passage of S.B. 189 would prove we were wrong on both counts."

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