We Allow Health Insurers To Discriminate Against Women
Health insurance companies are in the business of making money. That means they have to pay out less in medical care then they get in premiums. That means doing their utmost to avoid signing up people that may cost them more money. And apparently women cost them too much.
Women eligible for employer insurance are protected by federal laws that prohibit discrimination based on gender. But states regulate the individual insurance market and most states do not protect women. Here is where we can see what insurance companies do when they are not heavily regulated and have no competitive incentive to curb their ways.
Insurers discriminate when setting their prices.
Data from insurance companies and online brokers of the individual insurance market shows that women pay much more than men of the same age for individual insurance policies providing identical coverage.
A report by the National Women’s Law Center (NWLC) found “huge and arbitrary variations” in premiums charged to women and men:
“For the capital city in each of 47 states and D.C., NWLC sampled two plans for the same-aged men and women among individual insurance plans. The Center found that insurers who practice gender rating charged 25-year-old women anywhere from 6% to 45% more than 25-year-old men; charged 40-year-old women from 4% to 48% more than 40-year-old men; and charged 55 year-old women premiums that ranged from 22% less to 37% more than 55-year-old men. The huge variations in premiums charged to women and men for identical health plans highlight the arbitrariness of gender rating, and the financial impact of gender rating is compounded when insurers also charge more for age and health status when setting insurance premiums.”
An editorial in The New York Times on this problem ends with a call for an end of these practices:
“Insurance companies long ago stopped charging premiums based on race, even though they offered similar actuarial arguments. There are laws against using gender to set rates in employer-based health insurance. Surely it is time to eliminate gender-based premiums in the individual health insurance market as well. Otherwise women, who typically earn less than men, may find themselves priced out of adequate health coverage.”
Insurers discriminate when selling their policies.
The editorial in The New York Times notes that the NWLC study also “found that in some states insurers are allowed to reject applicants for reasons that effectively exclude many women, such as having had a Caesarean section or surviving domestic violence, and that the vast majority of individual policies don’t cover maternity care.”
The practices the NWLC report highlights are legal in those states. But insurance companies are not above skewing legality to avoid the risk of covering women. A 2001 e-mail sent by Amerigroup Illinois director of medical management to company managers effused, “Please keep up the good work with the marketing reps of not trying to sign up pregnant women.” Five years later, a federal jury awarded $48 million in damages against the insurer and its parent company for discriminating against people with health conditions and pregnant women enrolled in the federal Medicaid program.
Insurers discriminate when designing their benefit packages.
The NWLC study also shows that it is difficult and costly for women to find health insurance that covers maternity care in the individual insurance market:
“The vast majority of individual market health insurance policies that NWLC found do not cover maternity care at all. A limited number of insurers sell separate maternity coverage for an additional fee known as a “rider,” but this supplemental coverage is often expensive and limited in scope. Moreover, insurers that sell maternity riders typically offer just a single “one size fits all” rider option. Typically, a woman has no option to select a more or less comprehensive rider policy—her only option is to purchase the limited rider or go without maternity coverage altogether.
In the capital cities of four states—Hawaii, New Mexico, North Dakota and South Dakota—NWLC was unable, using the leading online provider described in the research methods, to find an offer of maternity coverage at any price. Not a single individual market insurance plan found through this online provider covered maternity, nor offered a maternity rider. After significant additional research efforts, NWLC was able to identify only a few health plans with maternity coverage in the four state capitals.
In another three state capitals, NWLC found just one option for maternity coverage using the leading online provider: a limited maternity rider offered by the same insurance company. This particular rider covers just $2,000 of a woman’s maternity expenses for the first two years that she is enrolled in the plan. Such limited coverage is far below the actual cost of maternity care in the United States, exposing a woman and her family to high levels of out-of-pocket spending. In 2006, the average cost of a hospital-based uncomplicated vaginal birth was $7,488; based on this figure, a woman enrolled in the rider described above could be responsible for nearly $5,500 of the cost of an uncomplicated labor and delivery, in addition to the cost of her rider premium.
The challenges encountered during this exercise—even for seasoned health policy experts—highlight the difficulties that a typical woman would face when trying to obtain individual health insurance that includes coverage for maternity care, as well as the very few options available even after scouring the market.
Will we continue to allow such discrimination?
Is it really OK for maternity to be considered just a “woman’s” problem? Because that is basically what we are saying when we allow this practice to continue. It is the woman’s problem and thus she should pay for it.
It is time for a health care system that does not allow insurance companies to put their profits above the societal good. Yes, a healthy pregnancy is a societal good because lack of proper maternity care can lead to low-birth weight babies who can have debilitating and costly health problems. Women getting the health care they need is a societal good because lack of proper health care can lead to loss of productivity and premature death.
That is why we need a public health insurance plan. Regulation, though necessary, is not enough, as seen by how insurers are willing to defraud Medicaid to avoid costly pregnant women. A public health insurance plan option gives us the ability to vote with our feet if the private insurance companies continue to fail us. That type of competition is the only way insurance companies may just be scared straight.
So stand with President Obama and Dr. Howard Dean to demand the choice of public health insurance! Write your Senator today!