Because they live longer. A summary, and here's the original report.

The idea is that smokers and obese people die sooner and are therefore less of a burden to the health insurance industry.

It's a matter of doing the right thing, or making more money. My bet is on the money.

Dave was talking about this last week, and people were giving him a hard time about it. Personally, I don't care how much I cost the health care system! That's why I pay insurance when I'm perfectly healthy!

I really think Health Insurance needs to be about providing for the customer instead of providing for their share holders. I would love to see Health Insurance companies all become non-profits so their focus could actually be on providing insurance. Until that happens I think we will see Insurance companies always do what is in the best interest of their share holders and not to their customers who pay for their insurance and actually need to use it.

What? Why?

They are private businesses, why can't they do whatever they want? Why should the owners of a business cater to anyone but themselves? It is their company...not yours or anyone else. If you don't like the coverage they provide you are free to find another company that suits your interests better. If these insurance companies start to notice their customers leaving because of they way they provide insurance, they will probably decide to change their ethic so they can keep you. Forcing them to operate a certain way isn't only un-just and a violation of rights...it's socialist.

Yeah, if I owned the business, it would be to make money as well. It's our choice to purchase health insurance... The unfortunate side effect here, and what the real problem is, is that the cost controls insurance companies put into place force doctors to charge more money to turn a profit.

By turning a profit, a health insurance company is focusing on providing insurance. It seems that a lot of times people confuse insurance with health care!

You're also free to not have insurance if you don't like their practices. They have no obligation other than to make good on any contract you enter into with them.

I can see a debate coming on... So I will back out... but I just wanted to put a thought in... That is that I work for a "non-profit" healthcare industry... And I hate to say it but Non-Profit does NOT necessarily mean that it is focused on providing insurance or healthcare... Money drives everything... Profit based or not...

This is where some Health Insurance companies are failing. You can be a customer for an Insurance company your entire life and pay in tons of money and then need their services (and receive some), and they can then drop you, simply because you made a claim. It doesn't matter that you paid them for 20 years and it only costs them a few thousand dollars, you ate into their profits. You do not get any of your money back, and that practice is not illegal. They are a business driven by profit, which means they can choose to toss away their loyal customers when they need to pay out some money. Yes, that customer can find new Insurance, but what about the Insurance Companies obligation? A customer buys insurance so that it will pay when they need it, not to get dropped when you do need it. The whole idea behind Insurance is you pay them to take the risk of needing to pay out. They agreed to do that, but there are countless stories of Insurance companies finding loop holes to never pay or to toss the bill back to their customer who already paid them to take on the risk, or they go belly up because all of the money paid to them has been handed over to share holders, so they go bankrupt since they can't pay out their claims. They are selling a service that they need to be committed to.

I live in Florida where we have had most of our Insurance companies go out of business (Health, Auto, Home, Rental, just about all of them) because they ran out of money. The companies that have stepped up to fill the void are non-profits and private companies. And they are doing well because they get to retain the money given to them, instead of having to pass that money onto share holders.

I strongly believe that Large (meaning lots of customers to spread the risk) Non-Profit Health Insurance companies and possibly Private Insurance Companies (not publicly traded) provide their customers with more reliability which then translates to services actually being provided when needed, because the money for claims are still be available, This doesn't cause Insurance to be any less expensive, just that the money becomes available to the Insurance companies when they do need to pay out. I don't expect the industry to all of a sudden want to become a Non-Profit, nor would I support the Government forcing this to happen, but I think that it would make our Health Insurance much better than it is today.

This is a short answer to your explaination (which i do agree with by the way) but sounds like the best way to avoid situations like that... HMO... becuase they are paying out to themselves, thus no reason to drop the patients when a claim is made. Plus this allows for instant coverage and no need to eve make "claims" anymore.. Just some food for thought

I guess I'll have to read the studies more carefully, because there's a lot I don't understand.

Why are healthy people more expensive? Sure, they live longer -- but don't they require less healthcare or less expensive care for those few more years because they're, well, healthy?

Maybe the study's definition of healthy doesn't mean healthy. If by healthy they mean "has a BMI below 25" then that's way too simplistic. For example, "The China Study" shows a drop in cancer rates for people who eat less animal-based foods, whereas this study says cancer rates are the same. I'll bet being cancer-free means huge savings.

That's an excellent point about Health Care is not Health Insurance! So we generate more income for doctors, hospitals, and pharmaceuticals. Big deal. Insurance companies employ hordes of actuaries whose only job is to use facts and figures in order to know how much to charge for insurance premiums, such that money in is bigger than money out. A large part of those facts and figures is knowing how long people live, and how much health care they require. An insurance company complaining that healthy people cut into their profits is like a Buffet Restaurant saying that people that eat a lot cut into their profits. What's your job again? Oh yeah: finding out what you need to charge people, and keeping costs down. Keeping costs down by hand-picking your customers is having your cake and eating it too.

There is no choice. Choosing between death by electrocution, death by fire, or death by guillotine is no choice at all. If a free market evolves all competitors into monsters, then it's time to break out the proton packs and cross those ion beams.