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Arizona Obesity Tax

By Rich Joseph

Many states, confronted by dire budget shortfalls, must devise creative solutions to adequately finance their strained Medicaid programs. One potential solution that has generated much controversy is that of Arizona’s governor, Jan Brewer, who recently proposed an annual $50 fee on those who are obese and fail to comply with their physician’s weight loss prescription. This fee would apply to childless adults; those excluded would include the disabled, the elderly, pregnant women and children, and those with life threatening illnesses. Revenue from this fee could help to sustain Arizona’s Medicaid program, which has expanded coverage by 30% despite a 34% decrease in general fund revenue since 2007.  All told, with about 1.7 million obese people in Arizona, the proposal could fill a $500 million gap in a $1.1 billion budget shortfall. If approved by the state legislature without objections by the federal government, this would mark the first time that Medicaid patients would be penalized for what the state deems as unhealthy habits. Regardless of the final outcome, the idea of an “obesity tax” has sparked an important national debate.

Those who endorse the proposal site the irrefutable link between obesity and escalating health care costs.  Estimates of the cost of obesity in America range from $150 billion to $270 billion annually.  Given the state’s obligation to provide health care coverage to 1.35 million people, it seems justified to ask those who are responsible for a large chunk of the cost to put more back into the system. Those who oppose the proposal suggest that this is discrimination against obese people, many of whom struggle to control their weight.  Opponents have labeled this penalty a “fat fee,” to emphasize the sense of victimization and government interference in personal freedom. On the flipside, it can also be argued that the non-obese taxpayer is equally victimized by the skyrocketing costs of Medicaid. In the long run, this fee is designed less for revenue generation and more for behavior modification—to incentivize people to lead healthier lifestyles for their own health and wellbeing. Indeed, a carrot and stick approach may be the next clear step in guiding behavior change, but a few gaping holes in this approach must first be addressed.

The first problem with the proposal concerns who is fair to subject to an obesity tax. When asked who would be included in this measure, Monica Coury, a spokeswoman for Arizona’s Medicaid program, stated that "We are talking about able-bodied people who have the capacity to manage their weight.” Clearly, the “capacity” to manage weight is subjective and hence, difficult to firmly define. Consider the number of Americans who suffer from chronic lower back pain. Would these people be considered “able-bodied?” Would it even be safe for them to take a shot at weight loss by engaging in an exercise program without proper instruction from a certified personal trainer or physical therapist? Can these people rightfully be expected to control their own weight? Or, consider the many individuals on Medicaid who live in food deserts—areas and neighborhoods bereft of grocery stores and access to healthy food options. All that exists within walking distance are fast-food chains and corner stores that sell calorie-dense and nutrient deficient foods. Even if these people are “able-bodied”, do they truly have the capacity to manage their own weight? And then there are those who work three jobs to make ends meet. Given the link between weight gain and sleep-deprivation, would the law make exceptions for these people as well? Such questions, all of which are bound to arise if this bill is enacted into law, reveal the complex causes of obesity, the levels on which these causes arise, and how such levels intersect and interact. Human behavior is only one cause of obesity, and until the toxic food landscape is razed, it is unfair to consider all obese people on equal footing for behavior change.

If a fee is to be levied against an individual for a certain offense, there must be strict, standardized guidelines of enforcement as a matter of fairness.  Wiggle room is a justified cause for anger, not to mention the logistical nightmare of proper oversight and management. Any inconsistency in the application of this fine would grant the leeway needed to game the system, which signifies another major issue with any behavior engineering strategy. Clearly, the objective here is to promote healthy sustainable weight loss, not simply weight loss by any means. However, the solidification of changes in human behavior is a gradual process, the gains of which are realized long-term. If all that people need to do is lose weight for their annual check-up, what would stop them from doing a crash diet to trick the scale – and the physician – into believing that they had adopted a sustainable weight-loss strategy?  This would be reminiscent of a weigh-in before a wrestling or boxing match in which participants go on calorie-restrictive diets and dehydrate themselves in order to squeak into a lower weight category. Arizona residents who want to avoid a $50 fee at their upcoming physical exam could easily do the same and the relapse into old habits. This is clearly not the behavioral change that Arizona seeks to instill, but who is to say that it is not easier to game the system rather than put in the effort to lose weight properly? 

In fact, this entire focus on weight loss may also be a bit misguided. Obesity is categorized by body mass index, a proxy for human body fat based on an individual’s height and weight. Although BMI works well on an epidemiological level to stratify groups, it does not always reflect an individual’s level of adiposity and risk for obesity-related comorbidities. As a biomarker, it does not account for age[i],[ii], fitness, ethnicity[iii], race[iv], gender[v], or body composition[vi]—all of which factor into obesity-related health risks. In addition to BMI, or perhaps instead of it, the severity of weight-related illnesses, associated biomarkers, and more intermediate risk factors would be necessary to capture the financial impact of obesity. The focus should be on obesity-related risk factors, such as the rate of onset of metabolic syndrome and changes in insulin sensitivity. Results from prospective, controlled intervention trials will provide information on baseline characteristics in subgroups of the obese population that use the most Medicaid resources. Beyond incorporating both the number and severity of comorbidities into such models, it will be important to integrate a “velocity” component that measures the rate at which BMI, biomarkers of obesity-related illnesses, and comorbidities are growing worse. If an obesity tax were to be instated, it would only be fair to apportion a higher percentage of the tax to those with multiple comorbidities and rapidly accelerating adiposity since these are the people who are responsible for the lion’s share of obesity-related health care costs.

A final, and perhaps most relevant consideration of this obesity tax proposal is the role that the physician would play in exacting this fee from an obese patient.  Under this plan, physicians would essentially be the middlemen, who prescribe a weight loss plan to an obese patient and then report this patient’s name to the state if he or she does not follow through with the prescription. Clearly, this puts the physician in an uncomfortable position, forced to act more as a “weight enforcement officer” than a confidant and a partner in health care. Would physicians feel comfortable snitching or ratting out their patients who do not successfully lose weight? This jeopardizes the confidentiality of the patient-doctor relationship and could make the patient view the physician as the enemy—an agent of big brother, if you will. This may prompt some physicians to shy away from taking on obese patients with chronic conditions, which would not only be a shame, but also completely antithetical to the role of the health provider. These patients are exactly those who need help the most, and must be accepted with open arms rather than shunned, averted, or treated as ticking time bombs.

The overarching objective—to reform the payment system for Medicaid so providers have a financial incentive to prevent disease, improve quality, and to reduce the number of hospital admissions—is spot on. However, the idea of imposing a fee on obese people, despite the clear link between obesity and health care costs, is problematic. Until the obesogenic environment is improved and more accurate measures of obesity-related health care costs are created, it is only fair to levy taxes against clear culprits of obesity rather than obesity itself. For example, the much disputed tax on soda would be more justified given its clear link to the rise in adiposity; soda is devoid of all possible nutritional quality and, as a commodity, its purchase completely optional. Likewise, a fine for smoking, which is also included in this same proposal, seems more permissible since this unhealthy habit can be controlled exclusively on the individual level. Since the environment plays such a prominent and powerful role in obesity promotion, punishing the individual seems too extreme and unjust. The use of financial penalties to change human behavior is plausible, but first, the guidelines must be indisputable, the incentives must be properly aligned, the measures must be accurate, and the roles of all enforcement agents must be agreed upon.

[i] Yermilov I, McGory ML, Shekelle PW, Ko CY, Maggard MA. Appropriateness criteria for bariatric surgery: beyond the NIH guidelines. Obesity (Silver Spring). Aug 2009;17(8):1521-1527.

[ii] Zamboni M, Armellini F, Harris T, et al. Effects of age on body fat distribution and cardiovascular risk factors in women. Am J Clin Nutr. Jul 1997;66(1):111-115.

[iii] Low S, Chin MC, Ma S, Heng D, Deurenberg-Yap M. Rationale for redefining obesity in Asians. Ann Acad Med Singapore. Jan 2009;38(1):66-69.

[iv] Stevens J, Truesdale KP, Katz EG, Cai J. Impact of body mass index on incident hypertension and diabetes in Chinese Asians, American Whites, and American Blacks: the People's Republic of China Study and the Atherosclerosis Risk in Communities Study. Am J Epidemiol. Jun 1 2008;167(11):1365-1374.

[v] Jackson AS, Stanforth PR, Gagnon J, et al. The effect of sex, age and race on estimating percentage body fat from body mass index: The Heritage Family Study. Int J Obes Relat Metab Disord. Jun 2002;26(6):789-796.

[vi] Aasen G, Fagertun H, Halse J. Insulin resistance and dyslipidaemia in obese premenopausal and postmenopausal women matched for leg/trunk fat mass ratio. Scand J Clin Lab Invest. 2009;69(4):505-511.

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