Grim news from the health care front:

Pointing to rising health costs and the oversized proportion of insurance claims attributed to smokers, some employers in California and around the country are refusing to hire applicants who smoke and, sometimes, firing employees who refuse to quit.

“Employers are realizing the majority of health costs are spent on a small minority of workers,” says Bill Whitmer, chief executive of the Health Enhancement Research Organization, an employer and healthcare coalition in Birmingham, Ala.

Federal and state laws bar employers from turning down applicants or firing workers based on race, religion or gender. Some states have enacted laws offering similar protections for smokers. But experts say workers in nearly half the states, including California, have few legal options if employers decide to prohibit them from smoking outside the workplace.

Today, it’s smoking, but tomorrow it could be obesity or 100 other conditions or behaviors — and employers may not even wait to find strong supporting evidence before acting:

Though some studies have shown that smokers have higher absentee and lower productivity rates than nonsmokers, economists say the research is limited. It’s possible, they say, that smokers don’t dramatically increase health costs with chronic and expensive conditions like emphysema, heart disease and cancer until they’re much older, when they may be employed elsewhere or retired.

This is a classic slippery slope problem. As the Times put it:

Critics are concerned that if more companies follow suit, it will lead to other employer intrusions on workers’ lives. What is to stop companies from telling workers they can’t ride motorcycles? Or eat junk food?

We’re finally coming face-to-face with a deep tension in public policy. On the one hand, the dynamism of the US economy depends in part on the freedom of companies to hire and fire nearly at will, a drastic difference from regulations in place in Europe. But we depend on private employers to pick up the tab for health care for the bulk of our population. For a long time, they were generous in covering their workers (see, for instance, General Motors 1945-1970). And even as many employers have cut back or dropped coverage as costs have risen over the last twenty years, it has almost always been at the firm level. But refusing to hire or even firing workers for smoking could be a sign of a much more fundamental problem. If employers start discriminating based on behaviors (smoking, overeating) or pre-existing conditions (obesity, diabetes, previous incidents of cancer), it could very quickly break the risk-pooling function of health insurance; make it harder for non-healthy people to get jobs and coverage; and push more people with high medical costs into Medicaid. If only the healthiest people get covered, the private health insurance system in this country will essentially be destroyed.

What’s the solution? I don’t know. We should be careful before dumping more regulations onto companies, but it seems that the question of employer discrimination based on actual or anticipated health care costs needs a closer look. That’s a starting point, a least. There are much bigger questions here about fixing the system at a more fundamental level, but I’ll leave them for another day.