Annual Medicare Costs and the Ethics of Physical Activity

A recent paper published in the BMJ (British Medical Journal) shows that adults who were at least moderately physically active from adolescence through middle age had significantly lower annual Medicare costs than those who were consistently inactive. I have previously argued that, for many reasons, exercise is an ethical behavior. As I’ll explain in this piece, this recent paper provides additional support for the ethics of exercise.

Group Benefits

Let’s begin with a simple premise. If a person receives benefits as a result of being part of a group, that person should not disproportionately drain the group’s resources. Take the example of a group of students working together on a school project. Each student receives a benefit (a good grade) from the successful completion of the project. But a student who does not contribute to the group’s work is not treating the other group members fairly. He uses the group’s resources (the other students’ brainpower and effort) without adding anything to the project. And the other group members rightfully resent him for it.

A free rider on multi-person bicycle

This premise forms the basis of the free rider problem, in which a person receives a benefit without contributing to the production of that benefit. For example, every nation would like to reap the benefits of mitigating and even reversing climate change. But it is harder to convince each nation to shoulder the economic costs of climate protective measures. Turkey remains the only G20 nation that has not ratified the Paris Climate Agreement. Let’s say that the other nations live up to their promises and Earth’s climate improves. Then Turkey would be a free rider in that it would reap the benefits of a more sustainable Earth without contributing as much to the costs of that improvement.

Medicare and Physical Activity

Medicare is a government-created health insurance program for retired Americans. It is funded by a combination of federal income taxes on all Americans, payroll taxes shared by employers and their employees or paid entirely by self-employed workers, and monthly or annual premiums paid by individuals using Medicare for their healthcare costs. So all tax-paying Americans contribute to Medicare, and some use it to help cover medical costs after retiring.

According to the BMJ study, average annual Medicare costs differed significantly depending on the subjects’ physical activity levels from adolescence through middle age. The researchers asked subjects about their physical activity levels at ages 15-18 years, 19-29 years, 35-39 years and during the ten years immediately preceding the start of the study (an age range of 43-64 years across all subjects). They then compared the subjects’ responses to their Medicare records (accessed with the subjects’ consent).

Subjects who engaged in 1-3 hours of physical activity per week during middle age (ages 43-65) had an average of $1,365 less in annual Medicare costs compared to subjects who engaged in less than one hour of physical activity per week. The difference was even greater for subjects who were physically active for seven or more hours per week. Those subjects averaged $2,079 less in annual Medicare costs compared to the inactive group.

Changing Behavior

The researchers also classified subjects as maintainers, increasers or decreasers based on changes in their physical activity levels from adolescence (ages 15-18) through middle age. The researchers then compared these groups to a reference group of subjects who maintained less than one hour of physical activity per week from adolescence through middle age. Compared to this reference group, adults who maintained moderate or high activity levels averaged at least $1,200 less in annual Medicare costs. Subjects who increased their activity levels in early adulthood (between 15-18 and 19-29 years) and maintained their higher activity levels throughout adulthood averaged $1,874 less in annual Medicare costs. And subjects who increased their activity levels after the age of 39 averaged $824 less in annual Medicare costs.

This inverse relationship between physical activity levels and healthcare burdens is well established. A 2010 study of elderly Japanese subjects also found an inverse relationship between physical activity and per capita medical costs. And a 2006 review of 40 studies showed that lack of physical activity contributed to 4.6% of national healthcare expenditure.

The Costs of Inactivity

Medicare and other health insurance programs help protect users against unexpected health problems. Users make periodic contributions to the insurance fund periodically and receive financial assistance should they encounter medical issues. Medicare also requires its users to pay a premium when they use the program to help cover their medical costs. In this respect, self-interested Medicare users have a good reason to increase their physical activity. People who are more physically active can expect to pay less for healthcare in the future.

Annual Medicare Costs and the Ethics of Physical Activity

But when it comes to Medicare, all taxpaying Americans are already contributing to the insurance fund. When Medicare users incur medical costs, part of those costs are paid by Medicare and financed by other Americans. A 2012 analysis found that the average American receives Medicare benefits that are about three times more than what they contributed through taxes. That means that these benefits are financed, in part, by current workers.

If the average Medicare user receives benefits that triple her contributions, then physically inactive users receive more than triple benefits and active users receive less than triple. Thus we have an immediate inequality. For Medicare users who made equal pre-retirement contributions, inactive users see greater benefits compared to active ones. In effect, the active user has helped to finance the inactive user’s health care, while receiving no benefits in return.

Looking at how much of Medicare is financed by current workers only exacerbates this inequality. Current workers must pay more money to support inactive Medicare users than active ones. If this trend continues, inactive Medicare users might contribute to the collapse of Medicare before current workers reach retirement age.

Cheap Riders

Simply put, Medicare users who were not physically active during adulthood drain the resources of Medicare by receiving disproportionately greater benefits than other equally contributing Medicare users. Additionally, inactive users place a disproportionate burden on current workers paying into the Medicare system. As they have made some contributions to the group, we cannot accurately call inactive users free riders. However, they are “cheap riders” in that they pay less for their benefits than do physically active users.

Here we have another ethical argument in favor of exercise and physical activity. Physically inactive users violate the ethical statement in our initial premise. They disproportionately drain the resources of all taxpaying Americans. People should be physically active so as not to place a disproportionately large financial burden on others (among other reasons).

A similar argument applies to Americans who are not on Medicare as well as to people living in other nations. Anyone who uses health insurance pays a premium for that service. Based on the research above, physically inactive people will get more from their health insurance plans than active people. So inactive people act as cheap riders on any health insurance plan by taking a disproportionately large share of benefits compared to their contributions.

Action Matters

It is worth noting that the reported results of the BMJ study came even after adjusting for body mass index (BMI) at age 18 and at the time the subjects answered the questionnaire about their health and activity levels. The aforementioned 2011 study found an inverse relationship between physical activity levels and medical costs irrespective of physical performance. In other words, it is physical activity that matters, not necessarily body composition or physical fitness. In order to avoid being a Medicare cheap rider, one simply has to be physically active.

These findings support what I have stressed previously, that it is action that matters, not the current state of a person’s body. All of us are capable of being more physically active, and we now have another ethical argument for doing so.