The cost of the Administration’s healthcare plan is $1 trillion, give or take several billion dollars, based on how the program looks in its final form. The proposal is facing resistance in Congress, some of it from the President’s own party. The concerns that have fostered the resistance were exacerbated by a study from the Congressional Budget Office which said that the healthcare plan, taken as a whole, would not lower rapidly increasing medical costs and would increase government spending more than the advocates of the bill had anticipated.

The issue of how the healthcare program will be paid for continues to disturb participants on both sides of the debate. Pharmaceutical companies have agreed to drop the costs of drugs for lower income and elderly people. Their contribution would be approximately $80 billion over the next decade. Hospitals have agreed to $155 billion in cuts in payments from the federal government over that same period.
Congress and the Administration have come up with a number of novel approaches to help close the $1 trillion gap. One of these is a program to tax the wealthy. The surtax could be as much as 3% of the income of households with more than $1 million per annum in income. Some economists view this tax as regressive, not in terms of healthcare consumption but in how it will affect the broader economy by taking money that might have been used for consumer spending out of circulation and into the tax system.
The most difficult problem with healthcare reform is the one that none of the legislation attempts to address. This problem is that people, who live unhealthy lives, by choice, place a tremendous burden on the healthcare system. Habits can be changed, even bad ones.  Obesity, smoking, drug addiction and alcoholism drive up healthcare costs, and each of the conditions is treatable in most cases. People need to be motivated by something other than fear of illness.
It would be cruel and immoral to deny the obese or people who drink too much access to hospitals, doctors, and drugs. Healthcare totalitarianism is not likely to become part of any legislation. It is against the principles of democracy and undermines the humanitarianism which is the bedrock of the medical profession.
It is reasonable to ask that those who choose unhealthy lifestyles to pay something for habits that make their care more costly, particularly because the cost is so large. In 2002, the Rand think tank reported that the obese spend 36% more for healthcare than the general population. A great deal of this spending is covered by insurance driving up costs in the industry. Obese individuals also spend 77% more on drugs that the average citizen.

The National Center for Health Statistics reported at the beginning of this year that 34% of Americans are obese compared to 32.7% who are merely overweight. Reuters reported that “the numbers are based on a survey of 4,356 adults over the age of 20 who take part in a regular government survey of health, said the NCHS, which is part of the Centers for Disease Control and Prevention.” The calculations to determine who falls into these categories are based on the body mass index. Not all medical professionals agree that it is the only reasonable measurement of overweight adults. The index does not work at all well when measuring professional football players. A half-back who weighs 220 pounds and is 5’11’’may have 5% body fat. He may not ultimately be healthy but he is not overweight based on fat but on muscle weight.

There are over 130 million Americans who are obese or overweight if the NCHS figures are roughly correct. It is more difficult to get accurate statistics for smokers and drunks.

The number of households with annual incomes over $1 million a year is very small, about one tenth of a percent of the population. That is a small pool of people to rely on to cover a large portion of the healthcare reform program. The pool of the overweight and the obese is much larger, although it is fair to say that most of these people could not afford a one-percent surtax on their income. A large portion of these people live below the poverty line, not because the obese are poor but because overweight adults are found throughout the population.
Taxing the overweight and obese, even at a very modest level of a fraction of a percent of their household incomes would bring in a great deal of money, even if the yield was under $100 a year per taxpayer. It would also give the obese a monetary incentive to lose weight, because those of normal weight and those who are thin might not only avoid a tax, but could be, in a system of incentives and disincentives, be given tax credits.
The difficulty with all taxes is how they are determined and monitored before they are levied. Hospitals  doctors or community centers would have to be pressed into service to keep track of the weight of all American adults. There would be a certain amount of fraud and cheating in the system, but that is true of any measurement program the IRS has in place. Taxation is, by its nature, inefficient and relies to a large extent on honesty and a system of audits.

The obese should get the same care as everyone else, but they should be expected to pay more for the privilege.

Douglas A. McIntyre

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