Colorado state senator Morgan Carroll has written a very persuasive article about why we should end gender-based pricing in the individual health insurance market. I agree that it makes more sense to average premiums across the entire population, but I also understand that doing so would mean a rate increase for men to offset the rate decrease for women. Senator Carroll pointed out in her article that 18% of Colorado women had no health insurance in 2007. While this is true, it’s important to note that during the same time period, nearly 23% of Colorado men had no health insurance. Averaging premiums for men and women and giving everyone the same average rate would mean that men would pay more than they currently do. It stands to reason that this would result in more men dropping their coverage and joining the ranks of the uninsured.
In Carroll’s article, she described a meeting of the Health Care Task Force where the practice of gender-based pricing in health insurance was debated. I am amazed by the comment from Rep. Jim Kerr, who explained that “women like to shop” and we should thus do a better job of shopping for our health insurance. And by the health insurance underwriter (a male) who said we should “blame God” for the fact that women’s parts are on the inside and men’s parts are on the outside. Seriously? Those comments alone make me hope for gender equality in health insurance just so that we can stop having this discussion.
Senator Carroll also noted in her article that in the individual health insurance market “the rates are already significantly higher than in the small or large group market.” This isn’t correct – in fact, the opposite is true. In most states, including Colorado, group health insurance premiums are more expensive than individual premiums. This is because individual plans can exclude pre-existing conditions or decline applicants with serious health issues. In addition, group plans have more state mandated coverage (like maternity) than individual policies. For my own family, a group health insurance plan would be twice as expensive as our individual plan (even for a policy with much higher out of pocket exposure).
It’s a common misperception that group policies are less expensive than individual policies, likely because employers pay a chunk of the group policy premium, masking the true cost of the employee’s health insurance. The amount that is taken out of an employee’s check is not the actual cost of the health insurance.