news

Progress Illinois: Blue Cross Fights To Keep Charging Women More

 

Will men see their insurance rates jump if health care reforms passes this year? That's what Blue Cross Blue Shield of Illinois claims. In what they are calling a "detailed actuarial analysis," the insurance giant estimates that premiums for younger, healthier men in the individual and small group markets would increase 119 percent under the proposals that have passed both chambers. CBS 2 political reporter Mike Flannery highlighted the study in a report last night, talking to a working-class male from Chicago who said he would no longer be able to feed his kids if his rates were increased by that degree.  Watch it in full 

here.

So why does Blue Cross expect rates for men to increase? That point gets a bit muddled in the CBS segment. Essentially, it boils down to "gender rating." That's a legal practice long employed by the insurance industry where women under 50 -- who research shows utilize health care services at a slightly higher rate than men -- are charged more for their insurance. Many insurers claim this type of rate discrimination is justified and that banning it would force them to jack up men's rates, which in turn could force some low-risk individuals out of the market, leading to rate hikes across the board. (Newsweek has a solid primer on the topic 

here.)

Meanwhile, congressional opponents like Illinois' own Rep. Jan Schakowsky -- who shows up in Flannery's report -- have argued that gender rating is biased and have included provisions in the final health care bills that 

would ban the practice on the individual market and for groups under 100.

 

Is there anything to Blue Cross' research? Not really. Flannery completely overlooks the fact that the rates women are charged are completely arbitrary. Indeed, a breakthrough study by the National Women's Law Center in December 2008 found a wide variation in gender-based premiums across the country. Insurers who factored in gender charged 25-year-old women anywhere from 6 to 45 percent more than 25-year-old men for identical plans. For 40-year-old women, the discrepancy ranged from from 4 to 48 percent.  That's just not rational.

Flannery also fails to mention that both bills include an 

individual mandate. Why is that important? If everyone is required to purchase insurance or face a penalty, regardless of one's "rating," then the market would function more like the current employer-based system, where risk is spread among a larger group of employees and women and men pay virtually the same rate.  Indeed, America's Health Insurance Plans -- the industry's largest lobbying arm in D.C. -- has already said that they support ending gender rating if a mandate is part of the final bill.

There's also a moral component to this issue.  On average, women already earn less than men. As a result, higher health care costs leaves them particularly vulnerable; 

more than half of medical bankruptcies are filed by female-headed households.

 

Providing adequate and affordable coverage to our mothers, daughters, and grandmothers should be a key priority of health care reform.  Don't let Blue Cross convince you otherwise.