The Safeway Amendment Scam

L.V. Anderson has a must read on corporate wellness programs:

In 2009, Safeway CEO Steven A. Burd launched a public relations and political campaign claiming that his company had seen a stunning drop in health care costs after implementing a wellness program. In an opinion piece for the Wall Street Journal, Burd said that Safeway had begun testing employees’ tobacco usage, weight, blood pressure, and cholesterol levels in 2005 and tying financial incentives to their results. Burd called this program “completely voluntary” in the same paragraph that he explained individuals who didn’t pass these tests had to pay $780 more in annual premiums, or $1,560 more for family plans. This kind of doublespeak is par for the course in the world of corporate wellness, where avoiding a financial penalty is often framed as getting a discount. Simply by instituting wellness programs, Burd wrote, “we have kept our per capita health-care costs flat (that includes both the employee and the employer portion), while most American companies’ costs have increased 38% over the same four years.” As it turns out, almost none of Burd’s story was true. As the Washington Post’s David Hilzenrath discovered, Safeway implemented its wellness program in 2009, not 2005, and only about 14 percent of its workforce was even eligible to participate in it. Safeway did manage to keep its health care costs down—by raising deductibles in 2006, shifting more of the cost of health care onto employees.

She noted the history of how the Federal government addressed this issue over time:

Throughout the 1990s, federal regulations kept workplace wellness programs in check. Companies were allowed to offer modest financial incentives, but the rewards could be tied only to participation, not to outcomes. In other words, companies could offer workers cash or a discount on their insurance premiums for completing an HRA or a biometric screening, but they had to give all participants the same reward regardless of their health status. That changed during the George W. Bush administration. In December 2006, Bush’s regulators in the departments of Labor, Treasury, and Health and Human Services—the three agencies that regulate group health plans and enforce HIPAA—finalized a new ruleestablishing that companies could tie financial rewards to health outcomes. Not only that, they could increase the size of the financial rewards up to 20 percent of the total cost of the health plan. Put another way, this meant that companies could shift up to 20 percent of the total cost of premiums onto unhealthy employees. Business leaders had told administrators that they’d have “a greater opportunity to encourage healthy behaviors through programs of health promotion and disease prevention if they are allowed flexibility in designing such programs,” as Bush’s staff wrote in the rule.

She continues by noting how this Safeway scam conned the Obama Administration into putting the “Safeway Amendment” into ACA. But why bring this up now as aren’t we doing “Repeal and Replacement” whatever that means? Eric Levitz explains:

Now that it’s public knowledge that the story behind the Safeway Amendment was a lie — and that there is little science to support that lie’s broader premise — you might think that Congress would scrap the provision. If so, you don’t know Congress. Rather than roll back the Safeway Amendment, the House GOP is working to expand its reach ... It’s almost as though entities that define their own wellness by the size of their profit margins can’t be trusted to promote the “wellness” of the human beings that they view as labor costs.

Using disinformation to promote an agenda of shifting more costs onto workers to enhance profit margins. Isn’t this what Paul Ryan means by “A Better Way”?