Myth surrounds reform’s ‘Safeway Amendment’


Throughout the health care reform process, politicians have held up Safeway’s health incentive program as a model for future government health plans. The supermarket chain’s program requires employees who fail basic health screenings for blood pressure, weight, and cholesterol to pay higher health insurance premiums. safewaylogo

Safeway maintains that this policy encourages its employees to make healthy lifestyle changes to in turn lower their health care costs. The Washington Post‘s David Hilzenrath looked into the grocer’s impact on proposed Health Policy plans. Hilzenrath reports on how misconceptions about Safeway’s wellness program could impact public health policy in the U.S. Senate’s proposed Safeway Amendment.

Under a regulation advanced during George W. Bush’s administration, incentives conditioned on meeting wellness targets are limited to 20 percent of the premium – including employer and employee contributions to the premium. The Safeway Amendment would allow employers to increase the stakes to 30 percent, and it would give federal officials license to raise the limit to 50 percent. It would also allow insurers to use the same approach – initially in 10 states and potentially in others.

Employers and insurers would be required to make exceptions for people with extenuating medical circumstances.

Supporters of the amendment maintain that it will encourage private-sector employees to monitor and improve their health. Dissenting organizations, including the American Heart Association and the American Cancer Society, suggest that the legislation will unhinge a central tenet of Health Policy: That an individual’s health status will no longer impact premiums.

Safeway credits its internal health plan for keeping the company’s health care costs nearly steady between 2005 and 2009. An external survey of 1,700 employers revealed that companies’ health care costs increased by 30 percent in the same time period, on average.

Hilzenrath reports that “a review of Safeway documents and interviews with company officials show that the company did not keep health-care costs flat for four years. Those costs did drop in 2006 – by 12.5 percent. That was when the company overhauled its benefits, according to Safeway Senior Vice President Ken Shachmut.”

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