HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Friday, April 3, 2009

The Cost of Health Insurance for Women

NPR's Morning Edition yesterday had a brief story by Sarah Varney on her experience with health insurance after a job loss.  She writes,

During the last economic bust, I got laid off and couldn't afford the monthly COBRA payments for my health insurance. I applied for an individual plan through Blue Cross.I was 28 at the time and had no health problems. . . .  I got a letter from Blue Cross saying I was denied. They told me it was because my medical records showed I'd gone to the doctor complaining of stomach pain. The pain had long since gone away, but Blue Cross said if I wanted insurance, my doctor would need to fax a note guaranteeing I didn't have stomach cancer. He faxed the letter, and eventually I got a plan.  It makes you wonder, though, if Blue Cross didn't want to insure me — a healthy 20-something — how on earth do actuaries determine who's a good risk and who's not?

"It's very scientific and fact-based," says Jeff Fluke a senior underwriter with the risk management company Ingenix in Minneapolis. Fluke says actuaries first calculate average health costs over a broad population like 28-year-old women or 50-year-old men. Then the underwriter adjusts those averages based on your medical history and health status — your height and weight, and whether you have high blood pressure, asthma or hay fever.. . .

These complex algorithms boil down to: Will you cost the insurance company more money than the insurer can make off your premium? And if by insuring you — a potentially high-cost customer — does it drive up rates and thus drive other, healthier customers away? . . .

The companies also want to avoid paying for predictable high-cost events like childbirth. And that, says Miller, makes the individual market a punishing place for young to middle-aged women. Childbirth, he says, is really a family cost. . . .

Women are also more likely than men to get annual exams and see the doctor when they're ill. And in most states, they pay a price for it. For example, in California, women pay up to 39 percent more than men for similar individual policies, even when maternity benefits are excluded.

California and several other states are considering legislation to ban the use of gender for individual policies. Ten states — Maine, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New York, North Dakota, Oregon and Washington — already have a ban in place. Insurers stopped using race as a basis for coverage decades ago.

"Now what people are asking is where can you draw the boundary and say it's OK to discriminate based on this trait, but not others," says David Magnus, who directs Stanford University's Center for Biomedical Ethics.

"One view is you shouldn't discriminate based on characteristics over which you don't have control," he says. "That doesn't really work or apply in this particular market since the No. 1 factor that is taken into account for health insurance is one over which people don't have control, and that's age." . . .

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