Misleading claims about Safeway wellness incentives shape health-care bill

President Obama discusses health care with chief executives Steven Burd of Safeway and Sally Jewell of REI. He has praised Burd's approach. (Charles Dharapak/associated Press)

When Obama delivered those remarks, the program was less than six months old, and by Safeway's own analysis the spending in question was on the upswing.

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Today, employers can give workers any amount of money for participating in wellness programs, such as classes on how to lose weight or quit smoking. But there are limits on incentives tied to results -- actually losing the weight or kicking the habit.

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.

Safeway's expanded incentives are rooted in a philosophy.

"I have no problem with a smoker having a 10-pack-a-day habit and killing him or herself," Shachmut said. "I mean, it's a personal choice. It's a free country. I just don't want to have to pay the health-care costs of that personal choice."

"And the same thing is true for obesity," he said.

In the battle over the Safeway Amendment, a central question is: How big must rewards and penalties be to change behavior, and at what point do they merely shift costs?

Safeway is not in a position to answer.

Politicians tend to describe the incentives as rewards rather than penalties. But, as The Washington Post reported in October, some employers sharply raise deductibles for workers and then give them a chance to chip away at the newly inflated charges.

"We structured it as a carrot, but I would quickly tell you that the carrot is nothing more than the mirror image of a stick, and vice versa," Burd told the Senate health committee in June.