Pricing health insurance to reward healthy behaviors

A well-written post by Eric H. Schultz, president and CEO of Fallon Community Health Plan in Boston at http://www.wbur.org/weblogs/commonhealth/?p=376 asks the question "Can — and should — health insurance be a positive agent for driving healthier living and producing better outcomes?". This wotic of often considerer on this Blog, since our health plans at http://www.short-term-medical-insurance.com/ have been financially rewarding healthier applicants for decades. Short term medical insurance (STM) is not even available to those with serious ongoing medical conditions. The intent is not to make social change but rather to effectively manage costs both to the insurer and ultimaely to the consumer. We know that that there is an acceptable way to use tiered pricing of health plans (as with STM policies) and unacceptable ways that have failed at other health plans (see a recent example in an earlier post this month). Yet despite the pricing differences th have existed for decades, there is no indication that tiered pricing in the individual insurance market has any social effects. This is likely due to the low market share of this coverage and the fact that the majority of people are covered by group health plans. While we admire the intent, we are yet unconvinced that tiered pricing in group health plans will ever be widely accepted on a legal or social basis.