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by leon on August 16, 2009

With the United States now agonizing over the future of health care, New York Times economics columnist David Leonhardt raises the question of whether the system needs a fat tax.
Leonhardt argues that people above a certain body-mass index should be required to pay higher health insurance premiums.
"Today, the great American public-health problem is indeed obesity. The statistics have become rote, but consider that people in their 50s are about 20 pounds heavier on average than 50-somethings were in the late 1970s. As a convenient point of reference, a typical car tire weighs 20 pounds," Leonhardt writes. "This extra weight has caused a sharp increase in chronic diseases, like diabetes, that are unusually costly. Other public-health scourges, like lung cancer, have tended to kill their victims quickly, which (in the most tragic possible way) holds down their long-term cost. Obesity is different. A recent article in Health Affairs estimated its annual cost to be $147 billion and growing. That translates into $1,250 per household, mostly in taxes and insurance premiums."
It's not a bad argument. But if it was implemented, there would be fewer people taking out health insurance. It's hard to see fatties forking out extra willingly.
Still, it's an interesting point because the principle of "user pays" lies at the heart of it and there is nothing wrong with that. Something needs to be done because, as this report says, obesity is the elephant in the room. One in three adult Americans are obese, as are one in six children, and if that trend continues, 40% of adult Americans will be obese six years from now. And that will put extra strain on the system.
The problem is likely to get worse too with some evidence emerging that the recession is fueling obesity. A German study, reported here, found that one in four people seriously in debt were also obese. Only 11% of the 9000 people studied were not in debt were obese. The researchers said that the results can be attributed to the higher cost of eating healthily and the tendency of worried individuals to eat comfort foods.
As obesity continues to escalate and hamstring the economy, more will be calling for a fat tax.
Permalink: Health care reform and a fat tax
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