Safeway's Role in Health Care Debate

SAN FRANCISCO (KCBS/AP)  -- Senate leaders were so impressed with Safeway's carrot and stick health care plan, they named a congressional amendment after the Pleasanton-based grocer.

A provision meant to give people an incentive to lead healthier lifestyles in order to keep costs down was added to one Senate version of the health care overhaul up for debate next week.

The so-called Safeway amendment gives employers with self-insurance programs permission to lower a worker’s premiums up to 30 percent if they quit smoking, lose weight or get treated for chronic problems like high cholesterol.

Safeway CEO Steve Burd said the grocer’s “Healthy Measures” program has kept per capita costs flat since it started several years ago. That savings, he told the Senate Health Committee in June, would be enormous on a national scale.

“If the entire country had taken Safeway’s plan design in 2004, by my calculations,” he said, “we would have a health care bill in this nation that’s $600 billion lower.”

  KCBS' Holly Quan reports

Burd said the company adopted the plan after realizing that 70 percent of Safeway’s health care costs were driven by employee behavior. “If we could influence the behavior of our 200,000 employees, we could actually bend that cost curve and improve the health of our employees,” he said.

This incentive plan worries groups like AARP, the American Heart Association and the American Cancer Society. They argue these kinds of incentives are discriminatory and lowering premiums for some in effect raises them for others.

Several versions in the Senate must still be reconciled before any bill comes to the floor for debate.

The Finance bill does not require businesses to offer coverage to their workers, either, although large firms that do not would be required to offset the cost of any government subsidies going to those employees.

The Congressional Budget Office said Wednesday that the latest version of the Senate Finance Committee proposal would expand coverage to 94 percent of all eligible Americans at a 10-year cost of $829 billion.

That plan still leaves about 25 million people uninsured when fully phased in, in 2019. Of those, nearly 17 million would be U.S. citizens or legal residents. Nearly 50 million U.S. residents now lack coverage.

(jro)