Gender pricing' out for haircuts and dry cleaning, but women still pay more for health insurance

By Bobby Caina Calvan
Sacramento Bee
May 11, 2009

A self-employed 30-year-old woman living in midtown Sacramento could pay as much as $420 a year more for individual health insurance than a man – and the California Legislature is debating whether that's fair.

The gender gap, known as "gender rating" by the insurance industry, recently has gained renewed attention. Last week, the insurance industry said it was willing to drop gender pricing – but only if the government requires every U.S. resident to obtain health insurance as part of a comprehensive health care overhaul.

"A lot of people didn't know that insurers were charging women more than men, and how much more," said Lisa Codispoti, a senior counsel with the National Women's Law Center. Her group produced a report last fall exposing a gap in premiums paid by men and women for health insurance.

California outlawed gender-based pricing a decade ago for such services as dry cleaning and haircuts. But insurers were allowed to price coverage differently based on age, geography and other factors, including sex.

Health insurance is more important than a haircut, dry cleaning – or even automobile insurance, Codispoti said.

"People don't die if they don't have car insurance," she said. "There are things you can do to survive if you don't have car insurance. Take the train, take the bus."

Women's advocates say gender rating is discriminatory and prevents many from obtaining health insurance, even though most concede that younger women typically seek health care services a little more frequently then men.

Whether that slight difference justifies the disparity in premiums is a matter of debate.
The outrage, though, isn't exactly widespread, noted Marian Mulkey, a senior program officer for the California HealthCare Foundation, a philanthropic think tank based in Oakland.

In the past two years, the California Department of Managed Health Care said only nine people have called to complain about the matter.

"There isn't a black-and-white answer in my book," Mulkey said. "It all depends on your standards of fairness and what you believe is the function of health insurance in spreading risks and sharing costs."
If women are using a lot more health care, perhaps they should pay more, she said. On the other hand, Mulkey said, the higher cost could "be enough to deter some women teetering on the edge between buying and not buying."

The city of San Francisco filed suit against the state in January seeking to outlaw gender rating, but it has put the matter on hold until the Legislature considers two bills – Senate Bill 54 and Assembly Bill 119, which would outlaw gender pricing – as soon as this week.

The Governor's Office said it had not yet taken a position on the bills.

Employer-based insurance plans cannot charge workers differently based on sex. But in most states, including California, it's a different matter for individual coverage typically bought by the self-employed, unemployed or those who work for companies that don't offer benefits.

More than a fifth of California's population of working-age women – nearly 2.4 million – went without health insurance in 2007, according to the Kaiser Family Foundation. Among low-income women, 39 percent had no coverage.

The federal stimulus package includes $24.7 billion that will pay 65 percent of COBRA health premiums for the recently unemployed and could help more women retain coverage under their former employer's plans.
But many other women still buy individual policies directly from insurers, despite high deductibles, because premiums are often lower than COBRA plans.

Last week's turnabout by the insurance industry came as momentum for health care change grows. Insurers do not want to be seen as an obstacle, and they're worried about a government-backed health plan that could siphon customers from commercial providers.

The statements on gender rating by insurers, however, come with strings attached, namely a mandate that would require the medically uninsured to purchase coverage.

"It will only work if we can get everybody covered. If we get everybody in the health care system, it changes everything," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, the industry's largest trade organization.

A universal health care system with an individual mandate would help insurers spread the risk, he added.
The National Women's Law Center study looked at rates paid by men and women of similar age if they were enrolled in one of nearly 350 plans offered by insurance companies. In some cases, some women paid as much as 48 percent more than men.

The study compared premiums paid by 25-, 40- and 55-year-old men and women for plans with similar coverage, deductibles and co-pays but excluded maternity coverage.

Among 25-year-old women, the gender gap ranged from no difference to a 45 percent margin favoring men, while among 45-year-olds, the gap extended to 48 percent. Among 55-year-olds, the study showed a wider disparity, with some women paying as much as 22 percent less while others paid up to 37 percent more than men.

In some cases, even nonsmoking women paid more than men who smoked, according to the center's findings.
The California HealthCare Foundation conducted its own research but found available data too limited for a comprehensive study.

Still, a sampling showed that rates for 30-year-old men and women were as much as 28 percent apart, with men paying considerably less than women for insurance premiums.

The Bee found similar disparities using quotes generated by the same Web site, eHealthInsurance.com, that the National Women's Law Center used for its study.

A 30-year-old woman who lives in midtown Sacramento could pay between $59 and $296 monthly for a health plan, depending on the company and range of deductibles.

On average, she would pay nearly $9, or 8 percent, more per month than a man of similar age – although in some cases the gender gap was as much as 34 percent.

In one case, the woman would pay $10 less than a man if she bought a $72 PPO with a $3,500 deductible offered by Anthem.

On the other hand, she would pay $139 monthly – $35, or 34 percent, more than a man – for an Aetna policy with a $2,500 deductible.

In a written response to The Bee's questions, Aetna said that "rates can reflect the underlying differences in costs for men and women, by age, as documented in actuarial studies and general claims experience. … Younger adult women tend to use slightly more health care services than men."

The company also noted that the gap narrows as people age. In fact, it said, most women begin paying less for health premiums in their 50s.