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Nov. 24 2009 - 8:45 am | 105 views | 1 recommendation | 8 comments

Is a fat tax really a poor tax?

LOS ANGELES, CA - JULY 24: A McDonald's fast-f...

Image by Getty Images via Daylife

When you go for that extra piece of pie on Thursday, think about your health insurance premium before you decide to pig out.

Several states are coming up with incentives to get people to lose weight and stop smoking.

In North Carolina, Time magazine reports, state workers with unhealthy habits will start paying more for premiums if they don’t try and lose weight or stop smoking. And Alabama is giving big discounts on health insurance to those state workers who already meet those guidelines.

All these new regulations are designed to make people healthier.

But I wonder: will they really just bankrupt the working poor who are already struggling to stay healthy?

Poor neighborhoods have much higher obesity rates than affluent ones. They also have greater barriers to getting thin. Food deserts – large geographic areas with no grocery stores – make fast food restaurants a short walk, but finding fresh food quite a hike. In Chicago, food deserts affect over 600,000 people, 200,000 of whom are children and 100,000 are single mothers.

Low-income people are also more likely to smoke. Smokers are 34 percent of those making $6,000 to $12,000 a year, compared to 13 percent of those making over $120,000.

So any fat fees or smoking levy will disproportionately affect those at the bottom. And while the health care debate rages, there’s no debate that low-income people already have less access and lower quality medical care.

In places like Alabama, where a discount may encourage a person to try shedding a few pounds or kicking the habit, putting a financial incentive inside a health care choice may be good for some families.

But North Carolina’s approach could cost poor families some serious cash. “Starting in July, state workers who smoke will be moved from the plan that covers 80% of health care costs to one that pays 70%, an out-of-pocket difference of approximately $480 a year, unless they agree to enroll in a smoking cessation program.”

480 bucks? That’s 66 hours of work at the Tar Heel state’s minimum wage of $7.25 an hour.

There are already great barriers to the poor getting well. Almost every disease is seen at higher rates among the poor. And the treatment they receive is already inferior.

They’re paying the cost of poverty with their lives, with their health. Can we really expect them to pay any more?


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  1. collapse expand

    Joe Bageant has a thoughtful, if rambling, response to the subject, here – http://www.joebageant.com/joe/2009/11/-shoot-the-fat-guys.html

    If you’re poor, there are very few things that offer a refuge from the relentless attack of Money. Food and cigarettes are a couple of the legal things that let you escape.

    There’s a nasty mean streak in American politics, equally present in what passes for the Left, that makes me believe the poor will be taxed until they can’t walk. It lets everyone else off the hook. Besides, who is going to defend the them–aside from the odd reporter–compassion is seen as a weakness, something a lot of people don’t feel they can indulge.

    Too, condemning–then taxing for their own good–someone who is overweight or smokes feels good, and appealing to middle class smugness will win you a lot of votes. Everybody, well almost everybody, wins.

    That’s a bumbling summary of Bageant has to say. I’d urge anyone to check out his work. The man can write.

    • collapse expand

      Bruce, are you calling me an odd reporter?

      Good comment. I read Bagaent’s column and thought it was really great. Thanks for sharing it. I thought your summary was great.

      Is cutting down on smoking and obesity a good idea? Sure. Is creating a financial incentive a good way to get people to change their behavior? Absolutely. But it does seem cruel at times to tax the little pleasures that people who are struggling use just to get by.

      In response to another comment. See in context »
      • collapse expand

        Yes, I’m calling you odd. In a good way, as in unusual, or occasional. I cringe when I see emoticons, but maybe my first comment would have been a little clearer if I had dropped one at the end of that sentence.

        Thanks for writing these kinds of stories.

        In response to another comment. See in context »
  2. collapse expand

    Hello Meghan,

    Yes, a cigarette would fall more heavily upon the poor as they do smoke more. However, a detail that you excluded from your discussion is that cigarettes kill a huge number of poor people every year. About 440,000 people die in the US from tobacco use and if you figure that 2.4 million people die each in the US each that means that almost 1 of every 5 deaths is related to smoking. That is more than alcohol, car accidents, suicide, AIDS, homicide, and illegal drugs combined. This is to say nothing of the non-fatal health problems related to smoking chronic bronchitis, emphysema, heart disease, and cancer.

    Since it is the poor who smoke disproportionately, who then suffers the health effect and costs of tobacco use disproportionately? The poor of course! If they can be encouraged to not smoke it is they who will reap the benefits. I will not even talk about how much money they will save by not spending money on cigarettes.

    Now a simple Pigovian tax (on both the cost of cigarettes and in this case on insurance permiums) has been shown to effectively reduce smoking. However, if this tax is combined with low cost smoking treatment programs, then the benefits, to the poor, will even greater. Most of the insurance premium reduction programs you mentioned include this provision so it is not like smokers just pay more, they are also given programs to help them quit smoking.

    Weight reduction is a bit more complicated but the same basic ideas apply.

    On the whole, it is a very good idea.

  3. collapse expand

    Megan, thanks for this report. The idea of raising rates on the poor for any reason at all seems reckless to me, but it turns out it’s actually a lot worse than that.

    The plan is actually to raise the rates on ALL state workers (move them to the 70/30 plan) and then allow them to prove that they are NOT obese by submitting to a BMI assessment and that they are a nonsmoker by submitting to random ’smokerlyzer’ tests.

    Can you imagine? The smoking police? And besides the indignity you’re submitting a whole workforce to, one obvious consequence is you’re not going to have 100% of the non-obese non-smokers certify for the better rate. It’s just statistically impossible.

    http://pulse.ncpolicywatch.org/2009/04/20/house-should-stand-strong-on-state-health-plans-flawed-wellness-provisions/

    The penultimate para in the Time article seems like a ray of hope though. I like this quote: ‘Says George Huntley of the American Diabetes Association: “This is not a wellness program. It’s a penalty for failing to achieve a specific health status.”‘

  4. collapse expand

    Another reason the city should stop trying to prevent Walmarts from being built.

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    About Me

    I'm a journalist living in Chicago writing about poverty and public housing. I don't come from the streets - I grew up on a farm. But I'm passionate about urban issues and getting to know people who are completely different from me. I'm quirky, funny and friendly.

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