Find us on Google+

Alabama Imposes “Fat Tax”

October 28, 2008 · 14 comments

Just one week after I published my primer on Alabama state taxes, an article was posted on TheRoot.com touting a new tax in Alabama: the fat tax.

It’s not as literal as it sounds. The Alabama State Employees’ Insurance Board has approved a plan which requires state workers to pay up if they don’t utilize free health screenings. The program, which will take effect in 2010, requires state workers to participate in a free health screening for cholesterol, glucose levels, blood pressure and body mass index (BMI). Workers who refuse to participate will pay a $25 monthly surcharge, which the state claims will be used to offset higher insurance premiums for unhealthy workers.

In 2011, Alabama state workers will have to take steps to reduce high risk behaviors as determined by the health screenings. The Wall Street Journal reports that state workers who are diagnosed with certain health conditions would have three options: seek free medical advice; enroll in a state-sponsored wellness program or take steps that lead to improved results at the next screening later that year. State workers which refuse to participate will be charged $25/month starting January 2011.

Opponents claim that these requirements are discriminatory and egregious. But Alabama points towards a similar program from three years ago that required state workers who smoke to pay $24/month to supplement the cost of health insurance as a success.

Further, the state argues that some intervention is required. Alabama has a death rate that far exceeds the national average. Additionally, the state exceeds the national average in cases of obesity and heart disease (according to the CDC); in fact, according to the CDC, nearly 2 in 3 Alabama adults residents are obese, the fifth highest rate in the country.

As the numbers of unhealthy residents climb – along with the spiraling costs of health care – Alabama is clearly willing to try new ideas to keep health risks and costs down. But is that the place of the government? Proponents say yes. Tax policy has been used to curb all manner of behaviors including under-age drinking, snacking and porn. These taxes, sometimes called “sin taxes” are meant to change your behavior.

Does it work? The jury is still out. Those in favor say yes, while critics claim such taxes are merely revenue raisers. What is true is that these taxes and surcharges get a lot of publicity… When the Philadelphia Inquirer ran an ad campaign claiming higher fares for fat people, the reactions were swift and loud – on both sides.

Are taxes like these fair or discriminatory? Is it the place of the government to curb perceived “bad behaviors”? Does it change the equation when the government bears the costs of the perceived “bad behaviors”? Tell me what you think!

{ 13 comments… read them below or add one }

1 Edward Wiest October 28, 2008 at 11:00 am

If the government doesn’t make employees bear the financial “moral hazard” of lifestyle choices, employers will. See, e.g.: http://www.gohealthinsurance.com/blog/coverage/entry/20071228 . Dillemma: how do you price “group” hea;th insurance so as to reflect the different risks differing lifestyles impose on the group as a whole?

2 Colin October 28, 2008 at 11:57 am

Seems like this is the natural progression to offering rebates for health club memberships and quit-smoking programs which Independence Blue Cross and others have been doing for a while.

3 Gary C. October 28, 2008 at 12:02 pm

I like to see this. It means my lifestyle choice costs me less money. It is exactly like someone who has lots of speeding tickets pays more for vehical insurance. I make a choice that helps me save money and I live a better life. Whats the downside to helping yourself?

4 Alexandra S. October 28, 2008 at 3:03 pm

Perhaps not a ‘Fat tax’ so much as how about raising evreryone’s rates then giving “healthy choices” discounts (say, $25 a month) if they participate in the free screenings and available modification programs if recommended (and if they’d add discounts for belonging to and attending a healthclub, that’d be even better). Sort of the let’s reward the good behavior so those whose behavior (and yes in some cases it isn’t behavior and can’t be helped) and choices are less healthy have incentive to make better choices (and something to grumble about besides how bad they are being treated).

5 Anne October 29, 2008 at 7:05 am

This is only the beginning…..first the smokers, now everybody else!
Those who control the purse strings OWN YOU. What’s next I wonder. The
government is injecting itself in every facet of people’s lives, and everyone seems to welcome this? They make it sound good, and everyone is being lead like sheep to the slaughter. What will the world look like
in a mere 10 years?

6 Skip McQuaid October 29, 2008 at 8:17 am

I don’t really consider this a tax. It is a cost of doing business. Governments are a business. They are charged with taking in money and paying out money and getting the best return they can for that money, whether it be the best roads at the cheapest cost or the least operating expenses (so that more would be available for the roads). There is a price to pay, no matter where you work, for behavior against the common good and that includes smoking, drinking and other unhealthy habits (I smoke and drink and eat very, very irregularly by the way) and if our state government can save a few bucks by charging folks for their unhealthy habits then good for them. Not that I believe, for one second, that the savings will reduce government expenditures thus taxes.

Skip McQuaid
Geneva, Alabama

7 CJ October 29, 2008 at 9:18 am

Considering that they’re taking the time to actually screen people’s health then I think this is pretty good. Not everyone who is fat is unhealthy. Not everyone who is skinny is healthy. Some of us are doing everything we can to improve our health and being penalized for not having yet achieved our goals is unfair. But since this is based on participation and progress then it’s something I can support.

8 angie October 30, 2008 at 1:40 am

MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES MORE TAXES

9 Melody October 30, 2008 at 11:27 am

I’ll tell you what, when I lost my job in 2004 I found out really quickly how much private health insurance costs. I had a pre-existing condition (a wimpy littly leukemia in 2002) which forced me to a HIPPA policy. My rates went up about $100/mo every year because people in my insurance class are unhealthy (gee . . .). I never made a claim on the insurance, but that didn’t stop the increases. If I only had to pay an additional $25/mo for cheaper insurance, I’d jump at it. When the bill finally got to $1000/mo, I had to cancel the policy; so now I’m uninsured. Because of that, I take much better care of myself now than I ever did when I had insurance — can’t afford to get sick! So, stop complaining and count yourselves lucky you have insurance through work, people.

10 pat October 31, 2008 at 8:19 am

sounds to me the government is trying to take more personal choises from the people.

11 JoAnn November 11, 2008 at 2:36 pm

What about taxing the homosexual because that’s where aids get started.

12 Haven May 29, 2009 at 10:37 am

I guess it should be looked at differently. America’s problem isn’t because we are lazy and that is why we are unhealthy. It’s due to the stresses of everyday life and this new tax that is going to be introduced just makes it that much worse. take an average joe for example, has a 10.00 an hour job and 3 kids and a wife that has a 8.00 an hr job. Both are unhealthy because they work hard to give the kids what they need and a few wants and struggle to pay their bills, they don’t have time to make it to the gym. Most working at this pay rate can’t even afford to buy fresh food items such as vegetables and fruit. (Believe me I know) It’s cheaper to buy the pastas, breads and canned food. The $ 50.00 a month took from them were does that come from? You think it will make them healthier to have to work harder to make up for that loss? I think it’s comformaty, What happened to choices and freedom? Where will it end, when no one smokes, drinks and everyone is a smitten size 5 and wears the same clothes?Now let’s take a look at other countrys such as Canada. they live longer than us and better than us. They have people that smoke, drink and unhealthy residents, nut not as many. They have a free health care system. Everyone pays the same amount through taxes (minimal) and they can go to the doc to find out whats wrong with them. their prescriptions don’t cost much if anything. there is no one that can’t seek health care. They take care of one another. From the poor to the rich they recive the same care verses here you cut your fingers off and they ask which ones do you want back attached because it cost a lot per finger, there they just attach them back. Women that want children and can’t have them here pay an arm and a leg to get pregnant. There nothing. And it’s not just Canada, look at France. Look up the documentary Sicko, it really will make you sick to your stomach.

13 jennifer May 27, 2010 at 3:59 am

Dear All, i
want to ask is fat tax good or not??
Does it bring benfits to us?? Or more harms than goods?
(it is for a debate competition: The motion is: This house believes that we should not put fat tax on fast food. But why??)

Leave a Comment

{ 1 trackback }

Previous post:

Next post: