Women Charged Higher Health Insurance Rates

June 24, 2008

Women insured by Blue Shield of California recently received a double whammy: Not only is the cost for individual health insurance cost going up, but now under a new two-tier system women will pay more than men for the same coverage. The change goes into effect July 1.

“It’s not about pregnancy,” writes L.A. Times columnist David Lazarus. “No, this is purely a matter of Blue Shield deciding that women, as a general rule, are more expensive to insure than men.”

Perhaps this is partly because women are more likely to seek preventive care, according to the Kaiser Family Foundation. But this should make them better insurance risks. After all, they’re proactively working to stay healthy. And isn’t that exactly what insurers encourage people to do?

“It doesn’t make any sense,” said Alice Wolfson of United Policyholders, a San Francisco-based advocacy group. “The insurers aren’t assessing risk. They’re assessing how much healthcare is used, even when it’s preventive treatment.”

A spokesman for the California Department of Insurance said there were no regulations preventing gender-based pricing for individual policies.

Vehicle insurers also use gender in determining rates. In their case, though, men often pay more for coverage because they’re viewed as the greater risk. Supposedly guys drive more recklessly and get into more accidents.

Yet men are nevertheless viewed as a lesser medical liability than women, who live longer on average because they tend to eat right, exercise more frequently and take better care of themselves.

Lazarus breaks down the difference in cost for Blue Shield’s Balance Plan 1700 — a high-deductible individual policy. Women and men pay the same at age 18 — $98 per month — but by age 20, women pay $119 while men pay $110. At age 45, women are paying $25 more — $271 to $246. The gap persists until age 60. At that point, women pay $548 a month while men’s premiums increase to $589.

Aetna Inc. and Anthem Blue Cross also charge women higher rates. A spokeswoman for Anthem Blue Cross told the L.A. Times that gender was added last year to the mix of factors that can affect an individual’s rates. Other factors include current health status, medical history, age, residence and occupation.

Lazarus also raises questions about how far insurers might go in the future to determine risks and related costs:

If women are more expensive than men to insure, and middle-aged women are significantly more expensive than middle-aged men, what about, say, older women with red hair? After all, they have fairer skin and thus are more susceptible to skin cancer.

How about if, statistically speaking, blacks are more expensive to insure than whites? Or Christians more expensive to cover than kosher-observing Jews?

David Gross, who covers California politics at the California Progress Report, writes that that while risk-analysis may be a standard insurance practice, “I think the public realizes that this is unacceptable social policy to have such discrimination, against women or any other group.”

Plus: This isn’t the first discrepancy in health care coverage we’ve noted this month. See Rachel’s post on women who have had a cesarean section being denied or having to pay more for individual insurance.

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