The Affordable Care Act was implemented to help reduce the cost of health care in America while improving the overall health of employees. Employers offer their employees incentives to encourage decrease of health risk factors in the form of financial incentives. The following paper aims to ascertain the probability of the incentives offered to boost employee well-being and as such cut down on costs used by employees in securing health benefits and employers in maintaining a healthy workforce.
The primary goals of the Affordable Care Act include health improvement, cost containment and cutting back discrimination in health care markets. Though the act provisions detail these goals separately, they collectively remain the driving force behind provisions implemented in workplace wellness programs.
Employers are encouraged by the act to develop wellness programs that are health-contingent, which offer rewards to employees who improve health outcomes that are measurable and change behaviors that adversely affect their health. As such, employers can curtail costs due to less staff turnover, and improvement of the general health of the employees. However, in another light, these programs may be viewed as advocates for the punishment of employees with poor health. Moreover, some studies claim that health-contingent programs may undermine the ACAs non-discriminatory goal since there is no sufficient evidence to support the allegation that costs go down due to the introduction of health-contingent programs (Horwitz, Kelly & DiNardo, 2013).
There is a large pool of evidence suggesting that while financial incentives may work in the short-term, they are less effective among people of working-age in the long-term. In a study conducted by the Centers for Disease Control and Prevention, chronic diseases account for 75% of medical care costs. However, this does not translate into a 75% health care cost and productivity loss for an employer. As such, the lifestyle of an employee does not affect the heath cost of an employer to a significant extent (Horwitz, Kelly & DiNardo, 2013).
There are three assumptions underlying standard health care programs which determine the likelihood of the plan to succeed. First, a program can detect employees with particular health risks and come up with incentives that cater for those risks in a manner that saves costs when compared to others (Gowrisankaran, Norberg, Kymes, Chernew, Stwalley, Kemper & Peck, 2013). Furthermore, incentives will motivate employees to change their lifestyles and as such improve their health. Lastly, health care programs assume that an improvement in the health of an employee will translate into cost savings for the employer.
It is evident that individuals with conditions such as hypertension, smoking, obesity and high cholesterol have greater medical expenses than their counterparts. This undermines the statement that such individuals are effective targets for incentive programs (Dursi, 2008). As such, program savings are unlikely to come from health improvements. Rather, they are likely to result from additional payments made by employees with health risks for health care in comparison with their counterparts. If this condition holds some truth to it, it would seem that the regulatory efforts by the ACA are jeopardized (Anderko, Roffenbender, Goetzel, Millard, Wildenhaus, DeSantis & Novelli, 2012).
Low-income typically suffer from conditions that are targeted by health-contingent programs. This means that they are likely to incur greater costs getting health care than their counterparts, which means the move by the Affordable Care Act would not be effective in its mission to reduce the cost of health care (Ebri, 2005).
In conclusion, the evidence against the act is more than the overall benefits that could be derived from implementing health care incentives, thereby making the move irrelevant in its mission to reduce healthcare costs for the nation in the long run.
- Aderko, L., Roffenbender, J.S., Goetzel, R.Z., Millard, F., Wldenhaus, K., DeSantis, C., & Novelli, W. (2012, December 13). Promoting Prevention Through the Affordable Care Act: Workplace Wellness. Centers for Disease Control and Prevention. Retrieved September 20, 2016, from https://www.cdc.gov/pcd/issues/2012/12_0092.htm.
- Dursi, M.C. (2008). CAN HEALTH PROMOTION PROGRAMS EFFECTIVELY REDUCE HEALTH CARE COSTS, INCREASE PRODUCTIVITY AND RETAIN QUALIFIED EMPLOYEES?. University of Rhode Island, Retrieved September 20, 2016, from http://web.uri.edu/lrc/files/Dursi-Healthcare.pdf
- Ebri (2005). Health Promotion and Disease Management Programs. Employee Benefit Research Institute, Retrieved September 20, 2016, from https://www.ebri.org/pdf/publications/books/fundamentals/fnd05.prt03.chp24.pdf
- Gowrisankaran, G., Norberg, K., Kymes, S., Chernew, M.E., Stwalley, D., Kemper, L. & Peck, W. (2013, March). Home About Archive Topic Collection Blog Briefs Theme Issues Subscribe Alerts Manage My Account Health Affairs Today – Daily E-Newsletter Expand A Hospital System’s Wellness Program Linked To Health Plan Enrollment Cut Hospitalizations But Not Overall Costs. Health Affairs Today. Retrieved September 20, 2016, from http://content.healthaffairs.org/content/32/3/477.abstract?etoc.
- Horwitz, J.R., Kelly, B.D., & DiNardo, J.E. (2013, March). Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting To Unhealthy Workers. Health Affairs Today. Retrieved September 20, 2016, from http://content.healthaffairs.org/content/32/3/468.full.