Alabama's "Overweight Tax": Oddity, or Preview of Times to Come?

Last week, Alabama officials announced a new health insurance plan for state employees who are overweight. Starting next year, all state employees will have to be tested for their body mass index. Those considered obese will be faced with a stern choice: lose weight fast, or pay extra for your insurance. Alabama is the first state in the Union to enact such a rule – which the media was quick to label a “fat tax.” The question is, will this measure in Alabama trigger a domino that expands throughout the entire country?

Alabama’s rule will impact over 37,000 state employees. The Southern state has the second higher rate of obesity in the country, right under Mississippi. About 30% of the population is obese, according to the U.S. Centers for Disease Control and Prevention.

Alabama state officials said the state employees won’t be left on their own. The state plans to offer programs, such as Weight Watchers subscriptions and YMCA discounts, to assist employees in their efforts to get fit and avoid the “fat tax.” Still, the approach raises question marks: who is going to decide which programs to use? What if one is already following a program that’s not on Alabama’s list of authorized programs? What will happen to state employees who, for reasons independent of their efforts and goodwill, are not able to lower their BMI enough to avoid the obesity penalty?

Does this controversial approach mean that Alabama officials believe the best incentive to lose weight is fear of financial punishment? If so, such view seems to be against the mainstream approach to fighting obesity: there is no negative incentive, such as fines or penalties, on the American College of Occupational and Environmental Medicine’s list of suggested tactics for employers to fight employee obesity.

More importantly, this approach could signal three profound changes, with widespread impact.

First, the measure taken by the Alabama state officials signals it’s OK to sanction employees for physical, or medical, conditions. By the same logic, overweight firefighters or police officers could be fired for not being able to do their job properly; overweight state teachers could be sanctioned for setting a bad example to their pupils, and overweight doctors of public hospitals could be penalized for setting a bad example for their patients. Where would this end? How would this be fair for those who are simply genetically predisposed to obesity, or gain weight as a secondary effect of some medication they are taking for an unrelated condition?

Second, the Alabama measure will make the other states of the Union pay close attention to the Southern state and likely implement similar measures for their own state employees. Watch for more sophisticated – or perhaps draconian – measures in other states, targeting employees with various conditions. Also, watch for legal challenges to the Alabama initiative.

Third, this measure will allow private insurance companies to create a separate class of insureds in their group plans, for overweight employees, and charge them a lot more. After all, if it’s ok for a state to do that, why would it not be ok for a private insurer? The future group plan may simply have two subgroups: one for employees with a BMI above 25 or 30, and another for employees with a BMI below 25. This would be a feast for private insurers!

If the Alabama measure will stay in force as it is, watch in the long run for yet another class of citizens, besides the uninsured and underinsured Americans: those who have to pay more for the same insurance package. Hopefully, those who are in charge will realize before long that obesity is a medical problem that needs to be solved by medical, not fiscal, methods.