PHOENIX - Arizona's cash-strapped Medicaid program is considering charging patients $50 a year if they smoke, have diabetes or are overweight. A spokeswoman for the Arizona Health Care Cost Containment System said Friday that the fee is intended to rein in health care costs by pushing patients to keep themselves healthy.

"It engages the consumer to start having a greater awareness of how they fit into the bigger health care puzzle," said Monica Coury, spokeswoman for AHCCCS. "We want to be able to provide health care to people. And we want to stretch our dollars as far as we can. Part of that is engaging people to take better care of themselves."

Some private employers and state governments have instituted higher insurance premiums for workers who are overweight or smoke, but Arizona's plan would mark the first time a state-federal health care program for low-income residents has charged people for unhealthy lifestyles.

The fee would apply only to certain childless adults.

One part of the proposal affects people with diabetes. Coury says diabetics who fail to follow their doctor's orders to lose weight would be subjected to the $50 charge.

Democratic state Sen. Kyrsten Sinema said that isn't fair to diabetics.

"This would fine people with medical conditions beyond their own power and control," Sinema said. "I just don't think it's fair to vilify someone with diabetes."

People who are obese or chronically ill, and those who smoke, would need to work with a primary-care physician to develop a plan to help them lose weight and otherwise improve their health. Patients who don't meet specified goals would be required to pay the $50 under the proposal.

The plan requires approval by the Republican-controlled Legislature, which has been considering $500 million of cuts to Arizona's Medicaid program to help eliminate a state budget deficit of nearly $1.5 billion.

A fee for Medicaid patients also would need federal authorization, and federal rules could prevent Arizona from enforcing the fee.

Coury says the $50 fee is a way of showing the federal government Arizona is serious about getting people healthy while stretching and managing dollars better.

"Part of that requires that we engage the consumer in active, healthy behaviors." •

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U.S. Companies Shrink Packages as Food Prices Rise

U.S. food prices have been rising in the last year, but it seems the growth is only just beginning. A sharp jump in commodities' prices this year will soon result in sticker shock for American consumers.

Large food companies have recently announced that they will raise the prices they charge grocery retailers for commodities-based products. For example, a chocolate bar will cost more soon: Hershey last week announced a 10% increase for most of its confectionery goods.

Of course, straightforward price hikes could cause consumers to buy less of those products or to choose less costly store brands. So in many cases, food companies are trying a different tactic: Keeping the price of an item the same while decreasing the amount of food in the package. The company recoups the costs of the rise in commodities and hopes consumers don't notice that they're getting less of the product for the same price.

Food companies have no obligation to tell customers about the smaller packages, but may suffer a backlash from consumers who notice how the packaging trick works. Here are some of the shrinking products that you might notice in your grocery aisles:

Kellogg Cereal
Company: Kellogg (K)
Commodities: corn, wheat, sugar
Size Reduction: roughly 15%, or 2.4 ounces, on average
Kellogg, which makes cereal such as Apple Jacks and Corn Pops, has passed higher grain costs on to consumers. In 2008, the company reduced the amount of cereal in its boxes by an average of 2.4 ounces. And in February, the company announced that it will raise the price of its cereals 3% to 4%. According to a U.S. Agriculture Department report in March, "higher wheat commodity costs should begin to affect cereal and bakery product prices over the next few months, causing prices to rise 3.5% to 4.5% overall in 2011."

Snickers Bars
Company: Mars
Commodities: cocoa, dairy, nuts
Size Reduction: 11%, or 0.41 ounces
Supposedly in response to pleas from obesity activists, the Mars Company split their "King Size" Snickers bar in half so that it could be more easily shared between two people. What calls the nobility of the company's intentions into question is that, in addition to making the cut, Mars also reduced the total amount of candy in each package from 3.7ounces to 3.29 ounces -- an 11% decrease -- while keeping the price the same.

Tropicana
Company: PepsiCo (PEP)
Commodities: frozen orange juice concentrate, gasoline
Size Reduction: 8%, or 5 ounces
A series of prolonged frosts last year sent citrus prices up 11.5% and drove up the price of frozen orange-juice concentrate to several-year highs. Meanwhile, the cost of transporting the concentrate has gone up as gas prices have increased. In response, Tropicana has made two adjustments: It increased the price of its gallon jugs by 5-8% and stealthily reduced the size of its half-gallon cartons from 64 ounces to 59 ounces. This 5-ounce reduction represents nearly an 8% decrease in size.

Haagen-Dazs
Company: General Mills (GIS)
Commodity: dairy, sugar, cocoa
Size Reduction: 12.5%, or 2 fluid ounces
The luxury-ice-cream company reduced the size of its standard container to significantly less than a pint, cutting it 12.5% from 16 fluid ounces to 14 fluid ounces. To make the smaller package less obvious, the company cleverly kept the top the same size, so it looks identical from above, but tapers dramatically in the middle. Haagen-Dazs's cheaper brands, Edy's and Breyer's, have cut their portions as well. Daily prices increased just over 1% in 2010, but are expected to rise as much as 5.5% in 2011.

Chicken of the Sea Tuna
Company: Thai Union Group
Commodity: tuna
Size Reduction: 17%, or 1 ounce
Chicken of the Sea's albacore tuna, previously sold in 6-ounce cans, now comes in 5-ounce cans. Rising tuna prices amid a worldwide shortage of the fish are partly to blame. Other tuna brands also have shrunk their can sizes, a trend which has been going on for years. Just over a decade ago, tuna was most commonly sold in 7-ounce cans.

Frito-Lay Chips
Company: PepsiCo (PEP)
Commodity: wheat, corn, potatoes
Size Reduction: 12.5% - 20%
With all the air included in chips packaging, it is easy for manufacturers to reduce the amount of chips in the bags without drawing attention. PepsiCo reduced the Lay's "Family Size" potato-chip bag from 16 ounces to 14 ounces in 2009. Bags of Doritos, Tostitos, and Fritos now contain 20% fewer chips than they did in 2009, according to The New York Times. Even smaller bags have been reduced by a quarter of an ounce. Rising gain prices have driven the changes.

Saltines and Graham Crackers
Company: Kraft Foods (KFT)
Commodity: wheat, salt
Size Reduction: 15%
Earlier this year, Kraft introduced its "Fresh Stacks" packages for Nabisco Premium saltines and Honey Maid Graham crackers. The packages contain a higher number of smaller cracker sleeves, meant to do a better job of preserving freshness and making the crackers more portable. The entire "Fresh Stacks" boxes contain 15% percent fewer crackers than the original packages, however, and cost the same amount. Kraft is, undoubtedly, being hit by rising grain prices. "Fresh Stacks" may be one of the company's ways of passing costs on to consumers.

Reese's
Company: The Hershey Co. (HSY)
Commodity: cocoa, dairy, peanuts
Size Reduction: 37%, or 0.1 ounces
Cocoa futures have more than doubled in the past three years, hurting chocolate companies. The Hershey Co. has just increased its wholesale prices by 9.7% across its entire product line. Its also introduced new Reese's "Minis," which are smaller than the classic Reese's "Miniatures" and cost more, according to The New York Times. Through FreshDirect, Minis cost $4.59 for an 8-ounce bag, while Miniatures cost $4.49 for 12 ounces. In other words, the Minis cost $0.57 an ounce while Miniatures cost $0.37 an ounce.

Bounty
Company: Procter & Gamble (PG)
Commodity: lumber
Size Reduction: 7.2%, or 10 sheets
Since June 2010, lumber futures have increased more than 80%. The cost of manufacturing paper products has gone up as well, and companies are reducing the size of paper-based products -- like toilet paper, moist towelettes and paper towels -- as a result. Proctor & Gamble recently cut the size of its Bounty 2-ply paper towel rolls from 138 sheets to 128 sheets. The company attempted to mask this change by advertising the roll as "25% thicker." Despite the increased thickness, the package reportedly weighs less. Proctor and Gamble competitor Kimberly-Clark has also reduced the size of its "Scott" paper-towel rolls.

Heinz Ketchup
Company: H.J. Heinz (HNZ)
Commodity: tomatoes, sugar, salt, corn
Size Reduction: 11%, or 4 ounces
The cost of wholesale tomatoes more than tripled last year from the previous year, according to the USDA, and prices are expected to grow another 10% this year. In response, Pittsburgh-based ketchup and condiment company Heinz has cut the portions of several key products, including its flagship Heinz 57 sauce, which now comes in a 4-ounce smaller package with no reduction in price. •

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Blessings to you and your loved ones in these most difficult times. -Missygirl*