Should unhealthy people pay more for health insurance?

It looks we’re going to soon see a big shake-up of the health-insurance system that will, hopefully, make it more affordable for those who need it most. Having given up on it in the face of rising premiums, I know I am watching this unfold with interest.

The one major sticking point, one that could cause policy makers and Australians a lot of grief is what’s called “the community rating system”, which means everyone pays the same prince for health insurance, regardless of whether they have unhealthy habits or higher risk factors for disease.

The government is consulting with the public in a desperate attempt o find out why Australians are turning away from private health insurance in droves, and health minister Sussan Ley says if people want to scrap the community rating system, there was “absolutely every chance it will”.

In the immediate firing line are people who smoke and, although Ms Ley says she is definitely not targeting smokers, she has also indicated that a revised system would ouse the “carrot rather than the stick” approach.

In other words, healthier people pay less.

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If smokers did have to pay more, would that mean people considered overweight would too? What about people who don’t exercise? And seeing as health risks inevitably increase with age, would that mean older Australians automatically pay more for their health insurance?

“I’m committed to (the community rating system) for the people who have policies now because we don’t want to make changes based on the expectations people had when they took out their current policy,” Ms Ley said, as reported by News Limited.

“What we’re doing now is forward looking. It’s forward thinking and it’s as I said asking all of the sometimes difficult questions to make sure we have private health insurance products that are flexible enough to give people value for money.”

Opposition health spokeswoman Catherine King said abolishing the community rating system was a “very slippery slope”.

“When you start to say that these people should pay more where do you stop, where do you draw the line?” she said.

“Is it because people are overweight, because they drink an extra glass of alcohol, is it because they don’t do enough physical exercise; are those the sorts of things you introduce?”

Do you think it would be more or less fair for health insurance premiums to be based on lifestyle factors and health risks?