Senator John McCain’s health plan is based on the idea that everyone should be on their own to buy their health insurance on the individual market. And it’s an approach fundamentally at odds with the point of health insurance: that we share risks. People with preexisting conditions, like McCain and myself, would pay much more for health insurance under his health plan, if we could get coverage at all.
Insurance companies have all sorts of characteristics they look at in order to increase premiums, such as preexisting conditions, occupation, age, and residence. But I hadn’t realized that the McCain plan would enable insurers to “rate-up” my insurance bill for not only my status as a breast cancer patient, but also my gender.
The point is that the insurers have given us just another example about how the individual market is fundamentally broken. Embracing it as the solution to our health crisis – as the McCain plan proposes to – will only make matters worse.
From the Los Angeles Times:
When it comes to health insurance, Valencia resident Tova Hack’s first problem is that she works part time and thus needs an individual policy for medical coverage because her employer doesn’t offer one.
Her second problem is that she’s a woman.
[…] 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.
Men and women start out as equals in Blue Shield’s eyes. The pricing chart for the insurer’s Balance Plan 1700 — the plan Hack signed up for — shows that 18-year-old men and women are both charged $98 a month.
By age 20, women are paying $119 monthly, while men are charged $110.
When they turn 35, women are paying $174 a month compared with the $162 men are paying. By age 45, women are up to $271 a month, while men pay $25 less, or $246.
The gap persists until women and men reach the age of 60. At this point, women are paying $548 a month for insurance, while menfolk see their premium soar to $589.
[Blue Shield spokesman, Tom] Epstein couldn’t explain the trend, saying again only that Blue Shield’s “egghead actuaries” concocted the numbers.
But he emphasized that Blue Shield wasn’t the first to come up with gender-specific pricing for individual health insurance. Aetna Inc. apparently introduced the idea to California, followed by Anthem Blue Cross.
“We’ve done it because our competitors are doing it,” Epstein said. “We don’t want to get a disproportionate share of high-risk people.”
By “high-risk people,” what he means is “women.”
Individual health insurance typically costs more than group coverage because the risks can’t be spread among a large number of people. Such risk pools allow all people with group policies to be insured equally, without biases for age or gender.
Many individual policies come with high deductibles and are intended primarily to cover major problems.