There are many reasons why you might pay higher insurance premiums than your next door neighbor. If you're a smoker and your neighbor is not, you probably pay 14 percent more for health insurance. If you work in an injury-prone profession such as mining, and your neighbor is a schoolteacher, your yearly premium will certainly be higher than his. But here's the most common reason you might pay more for health insurance - if you are a woman.
That's right: if you were born with a pair of ovaries and two X chromosomes, chances are that your insurance premiums are higher than the average man's, by as much as 85 percent. Current federal law has no restrictions on price rating based on gender; just like price rating based on tobacco use or profession, an insurance company is perfectly within their rights to charge different premiums to different genders. And why not charge women higher prices? After all, statistics show that women, like tobacco smokers or those in dangerous professions, tend to use health services more. A woman is more likely than a man to visit her doctor for a general check-up, schedule tests and screenings, and take prescription drugs. If she is in her child-bearing years, a woman may be especially interested in reproductive health services or maintaining day-to-day wellness.
It makes sense, then, that an insurance company would take into account these facts and calculate a higher premium for women. This gender-based price rating system does not sit well with the National Women's Law Center (NWLC). In their March 2012 study, the NWCL found that even though plenty of states have bans and limits against price discrimination based on gender, nearly one third of health insurance plans across the nation are charging women at least 30 percent more than men. In states with no limit on gender-based pricing, 92 percent of insurance plans charged women more, and without regard for actual individual health risk - a female non-smoker, for example, was usually charged more than a male smoker. Interestingly, women are not paying higher premiums due to maternity costs.
The majority of insurance plans do not cover maternity care; women must instead buy additional coverage, or pay more for a health plan that does offer such care. Taking away maternity care from the equation makes groups like the NWLC even more suspicious of insurance companies charging higher premiums to women. After all, if a woman must already pay for supplementary care related to pregnancy and birth, why should she pay additionally high premiums for general care as well? The National Women's Law Center also calls attention to the fact that price differences in coverage between men and women vary radically depending on the state and insurance plan. In Arkansas, for example, the NWLC found one plan that charged women 10 percent more than men, and another plan offering nearly identically coverage but charging women over 80 percent more than men in yearly premiums. The NWLC says that variations such as these prove there is no logical calculation for why women pay more - health insurance companies are simply using gender as an excuse to enforce blanket policies of discrimination.
The good news for women and the NWLC is that starting January 2014, health insurance companies will no longer be able to determine premiums based on gender. The Affordable Care Act stipulates that starting next year, an insurance company may set premiums based on just four criteria: geographic area, age, inclusion of a spouse or family member on the plan, and tobacco use. Gender and profession, as well as pre-existing conditions, may no longer be considered. However, even after this Obamacare policy kicks in, there is still one more type of health insurance that will be able to legally charge women more money - long term care insurance. People normally purchase long term care insurance while in their late 50s or early 60s; this type of insurance provides for end-of-life care including a stay in a skilled nursing facility, or an at-home caregiver to help with everyday needs such as eating and dressing. These are services that regular insurance plans do not normally provide, and as the population ages, long term care insurance increases in popularity. Because it is not subject to the same Obamacare rules as individual or group employment plans, long term care insurance will still be able to charge women more; in fact, one of the biggest long term care insurance providers has just announced that starting this April, women will pay higher premiums.
Genworth Financial is planning to start gender-based pricing due to the fact that women are making more long term care claims than men; the company reports that two thirds of its resources are going to women, therefore women should naturally pay higher premiums. Indeed, women generally live longer than men. Whereas a man will often have a wife to care for him in his later years, by the time a woman needs her own end-of-life care, there may be no other family members around for support, and so she must enter a skilled nursing facility or hire at-home help. Come April, women with Genworth Financial or other companies may be asked to pay 40 percent more than men for this long term care insurance. The Genworth Financial pricing announcement highlights the fact that even with provisions from the Affordable Care Act, women can still be charged higher insurance premiums. And perhaps this is fair - men generally pay more in auto and life insurance, so why shouldn't health insurance, too, base its price rating in part on gender? It is a complicated question, and one with big financial impacts for insurance providers, and women.