Should Women Pay Higher Premiums for Health Insurance?

My recent post on ObamaCare’s War on Men discussed the fact that ObamaCare’s elimination of gender-based insurance premium differentials unfairly penalizes men. It generated 128 comments, many of which speculated that pregnancy generated the cost differential.

As the following data show, women appear to use more health care even after their childbearing years are over. It is unlikely that babies are responsible for the entire cost differential. Even if they are, a price system that does not reflect differential usage will do a poor job of allocating resources.

Woman

 

Increased premiums for women would be unfair if they used more health services of the sort that are not covered by health insurance, something that has become more difficult now that ObamaCare requires that so many medical purchases be financed through some sort of health coverage. It is theoretically possible, for example, that women have more cosmetic procedures for which they pay cash.

However, evidence from market pricing suggests that this is not the case. In Denver in 2008, premiums for a medically underwritten individual policy, one that did not cover cosmetic procedures, were $8 dollars a month more for women in their 20s, $23 a month more for women in their 30s, $30 a month more for women in their 40s, $35 a month more for women in their 50s, and $1 a month more for women in their 60s. Colorado did not require individual policies to cover maternity until 2011.

Here are some additional data on utilization by gender from the National Center for Health Statistics. Note that costs over age 65 should not affect individual insurance premiums as people over age 65 are generally covered by Medicare.

The number of visits per 100 persons to physician offices, hospital outpatient departments and hospital emergency departments for men and women in 2010:

Men

Women

Age: Under 18

340

322

18-44

205

415

45-54

324

450

55-64

460

546

65-74

680

741

 

The number of people with one or more hospital stays in 2011, percent:

Men

Women

1-17 years old

2.3

2.3

18-44 years old

3.1

9.7

45-54 years old

5.5

7.6

55-64 years old

10.1

10.4

 

Mean annual expense per person with expense for health care and prescribed medicine, 2009. (Percent of people with an expense is in parentheses):

Men

Women

Under 65

$3,408 (77.6)

$4,939 (88.0)

65 or Older

$10,958 (96.1)

$9,419 (96.9)

 

Percent of adults with pain, 2011, and percent obese, 2007-2010:

Men

Women

Severe headache or migraine

10.8

22.3

Low Back Pain

26.8

29.9

Neck Pain

12.9

17.4

Percent Obese, aged 20 and over

34.4

36.1

 

Comments (58)

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  1. Buster says:

    Aside from the fact women bear children, there are other reasons why insurance premiums for women are higher. Most of the women I know see the doctor more frequently than I do. Women are more apt to visit the doctor for check ups and wellness visits. They tend to be more compliant with therapies that are prescribed. Men, on the other hand, tend to avoid the doctor whenever possible. Doctors often report that middle-age men often put off physician visits until their wives force them to go.

    I had a physician visit last year, and one the year before (none this year). Prior to that I saw the doctor a couple times in 2003. I am not unique. I don’t believe my father had seen a doctor in a decade or more prior to his death. My mother probably racked up dozens of visits, however.

    • Dewaine says:

      That is my observation as well. It may be a pride thing causing men to underuse healthcare or something else (paranoia?) causing women to overuse healthcare.

    • Megan says:

      Came here to say the same thing! I would be interested in further research/a survey that evaluates how many women appointments are “critical” or “necessary” vs. “check ups” or “precaution”.

  2. Dewaine says:

    Yes. Men pay higher premiums for car insurance for similar reasons.

  3. Ken says:

    If people aren’t charged real premiums, those who are undercharged will over-insure and those who are over-charged will under-insure.

    • JD says:

      Exactly. Resulting in a waste of resources and poor health/death, respectively.

    • Dewaine says:

      Unfortunately this is one of those things that would face enormous political opposition. “The War on Women” rhetoric would go through the roof and most men would oppose making women pay higher premiums because of a protective instinct.

      • JD says:

        That’s probably true. Free-market reforms that are better for society often get shot down similarly.

  4. Steven says:

    If there is unisex health insurance (the lone type favoring men), then I want unisex auto/life/LTC/etc. (and I want them retroactively back to my teen years when my Dad had me pay the additonal auto premium adding me to their policy caused, while no marginal increase was added for my sisters).

  5. Diana E. Furchtgott-Roth says:

    No one seems to care that men pay higher auto insurance premiums…

    • Dewaine says:

      I’ve also pointed that out. I just can’t imagine people letting this system change anytime soon. Some kinds of discrimination are decried, others are lauded.

    • Greg Scandlen says:

      The European Union recently required uni-sex rating for auto insurance. In the UK at least there was a huge fury over this “war on women.”

    • Buster says:

      Another good example is long term care insurance. Historically, many long term care insurers charged unisex premiums. This is changing, however.

      In 2011, women initiated two-thirds of new claims against long-term care insurance policies. Women live longer, and frequently are widowed, with no husband around to help out. By contrast, men often die before they have time to develop dementia and have a wife to assist them in their final years. Actuaries also say that payouts on claims by women are longer in duration than for men.

  6. Tim says:

    As long as the evidence is objective that women spend more money, then the appropriate higher premium should be justified.

    • Sam says:

      Right, this whole gender discrimination is just going to cause more subsidized care dependence.

  7. Allan (formerly Al) says:

    Are not women more of the caretaker type in our society, caring for the children and household? Wouldn’t that make them more accustomed and thus more likely to utilize this type of service?

    • Dewaine says:

      ? That wouldn’t account for them using more health care.

      • Allan (formerly Al) says:

        Why not? There is a level of ‘inertia’ that inhibits some people from going to doctors. Because of what I said above, I believe that level of ‘inertia’ is lower for women and thus women will end up using more health care even if everything else is equal.

      • Buster says:

        All could be on to something. There was several years when I didn’t visit a doctor because both of my doctors retired and I didn’t have a usual source of care. I finally found a new doctor I like, so not I am more apt to schedule an appointment. Half of my (two) appointments made in the past dozen years was due to coercion from a female loved one — who was sure the Earth would spin off its axis if I didn’t go to the doctor for a bad cold.

  8. Centrist says:

    Insurance is gambling. Premiums are simply wagers against the odds of an event. Insurers (The House) manipulating the odds based on gender is both unfair … and now, illegal. Why should a healthy woman have to wager more for the same potential payouts?

    • Allan (formerly Al) says:

      Discarding your major question, isn’t insurance supposed to be based upon risk?

    • Linda Gorman says:

      The point is that they are not the same potential payouts. To use your example, the probability of a payout for a woman is higher.

      Insurers aren’t “manipulating.” They are simply trying to make sure that the premiums from a particular customer cover the expected value of his/her medical expenses. If an insurer knows that you will cost more, it must charge you more in order to be fair to people that it knows will cost less.

      • Centrist says:

        “If an insurer knows that you will cost more, it must charge you more in order to be fair to people that it knows will cost less.”

        Therein lays the rub. An insurance company does not know that an individual ‘will’ cost them more simply based on gender. They are using actuarial/blanket assumptions to assign wagers (participation fees) on an entire gender.

        Let’s say that you sit up to the Black Jack table. Since women have won more often than men in this casino, there is a small sign that says “Minimum wagers – Men $5, Women $10″ Would you agree that the house was only trying “to be fair to people that it knows will cost less.”?

        Insurance is betting. You bet that you will get sick and the house bets that you won’t. The gaming commission (government) regulates the rules and keeps participation fees relatively equitable, since the players cannot get up and leave this casino anymore (ACA Mandate),

    • Greg Scandlen says:

      No it’s not. Insurance is a contract — I agree to pay you X premiums and you agree to pay me Y benefits. Each party gets to set its own terms. Only if both sides find agreeable terms is the contract entered into.

      • Centrist says:

        Absolutely, insurance is a contract. The contract states that you give me money every month, and ‘if’ you win (need medical assi$tance), I may or may not help you … depending on deductibles and coverage’s. If you lose (stay healthy) I keep your money and we roll the dice again next month. Remember, I set the conditions of the bet (contract) and how much your next bet (premium) will be.

        Normally in contract, there is a reasonable balance between cost and benefit. Until recently (ACA and preventative benefits), some never beat the house (received any benefit from their premiums).

        As DennisG said, there is a myriad of reasons why someone should pay more or less than someone else … but the government’s job is to ensuring that premiums are not discriminatory to race or gender.

        • Greg Scandlen says:

          Centrist, Do you have a life policy? Homeowners? Auto? Do you really think you are winning if you (or your heirs) have to collect a benefit? No, you are winning if you never collect. Ditto with health insurance. It is a good thing if you never need the benefits. You pay the premiums just in case something horrific happens.

          If I am an insurer, it is not a matter of “I may or may not help you.” It is a matter of fulfilling the terms of the contract you and I have agreed to. It is not some arbitrary game. If a deductible is part of the contract, it is part of the contract. If you don’t want a deductible, don’t enter into the contract with me.

          Who said “the government’s job” is to ensure against discrimination based on gender? Gender is an actuarially valid category, along with age, area, and occupation. Denying reality is one of the (many) reasons the ACA will fail.

          • Centrist says:

            “Who said “the government’s job” is to ensure against discrimination based on gender?”

            Well Greg, the answer is … Acording to the Constitution, Congress has the power and duty to regulate commerce and to enforce that power through appropriate legislation. The legislation that Congress saw fit to ‘insure against gender discrimination’ in health care is found in the ACA Section 1557.

            • Greg Scandlen says:

              Actually, the Constitution says “Interstate Commerce.” For most of our history insurance was not considered commerce.

              • Centrist says:

                I was generalizing so as to not bicker about semantics; however, our ‘current’ health care system is both interstate and commerce. So the answer still applies.

            • Dewaine says:

              Centrist,

              The Founders obviously intended a limited Federal government. How does your interpretation of the Commerce Clause not conflict with that.

              I can see how you could reach that conclusion by viewing the clause in a vacuum, but taken as a whole document along with the Founders personal writings, the idea that that was their intent is laughable.

              • Centrist says:

                The founder’s personal writings and opinions are valuable and diverse; however, what counts is what was put into legislation. The Constitution was written vaguely as to appease those divergent opinions … and … gives remedy to contestations. The ACA’s commerce regulations were passed by Congress, signed by the President, and validated by the Supreme Court … as the founders intended. We live with it until such time we can improve upon it through cooperation.

                • Greg Scandlen says:

                  Sorry, but SCOTUS overruled the Commerce Clause argument. That’s why John Roberts had to recast the “penalty” as a tax.

                  • Centrist says:

                    I think you refer to the ‘mandate’ as a tax, but the entire legislative package evolved under commerce regulation. Point being, entirely legal, constitutional, and now law. Where do we go from here, since backwards is not in the cards. Are you offering constructive advice for the ACA? If not, it seems like a big waste of time.

                • Dewaine says:

                  My point is that they misinterpret it. This notion that if the “supreme court says so it must be right” is ridiculous. I understand and respect your stance on the “law of the land”, but when that conflicts with economic laws and the original intent of the Constitution, we shouldn’t just submit and accept an inefficient path.

                  • Centrist says:

                    I agree that when someone ‘feels’ that a law is not in the best interest of the country, something should be done about it. But arguing economic opinions and original intent vs. actual text and interpretation is proving unproductive. Congress must cooperate on things in the ACA that they can agree on. Hollow gestures of repeal and continued obstructionism are accomplishing little.

                    • Dewaine says:

                      There is nothing in ACA worth salvaging, therefore obstructionism is the only way.

                    • Allan (formerly Al) says:

                      Dewaine, why do you allow the term obstructionist to be used? Keeping a brain dead individual alive for 20 years through extraordinary means is not something we find attractive. Permitting the individual to decide when and how to allow nature to take its course is considered compassionate. The ACA should be permitted a peaceful and quick death. Those politicians supporting this failed bill (that involved bribery and payoffs) while name calling others are the obstructionists and are mean spirited as well.

          • Vince says:

            Exactly. The insured will win even more if we use a free market system such as Auto/Home. Under those systems if people reduce risk by driving safely, remove hazards in the home etc the premiums reduce. It is safe to assume that under a similar system with health insurance that those who live healthier, those who do not use up all their deductibles will benefit from similar savings reducing their costs as well as societal costs of heath care.

        • Allan (formerly Al) says:

          “Therein lays the rub.”

          That is what insurance is all about.

          Insurance is not gambling. It is the selling and buying of risk where the party collecting the insurance generally doesn’t want to “win”. That is why when the ACA or anything else interferes with the insurance companies ability to adequately charge for the risk they have changed the entire nature of the insurance contract and reduced its efficacy.

        • Allan (formerly Al) says:

          @ centrist: “Normally in contract, there is a reasonable balance between cost and benefit. Until recently (ACA and preventative benefits), some never beat the house (received any benefit from their premiums).”

          Let me add:

          You should be the one choosing your insurance product and thus would be incentivized to buy the best product for your needs at the lowest cost. The only reason the purchaser loses in this voluntary contract is when they are forced to buy it and the costs along with the benefits are controlled. The ACA makes all of us losers at the start, but permits some to be winners. The biggest winners are the corporations that develop a monopoly and a fascist relationship with the government.

  9. Sabal says:

    Because the odds are changing based on gender.

  10. DennisG says:

    A few facts that do not go away on the gender issue, is also applicable to the comparison of auto insurance rates. Allan is right when he say’s, isn’t insurance supposed to be based on risk. But what about those from a wanton standpoint, choose not to lose weight, not give up smoking, not give up fast food, and love’s the edge in tangling in the arena of stress. It is like someone who knows better, but drinks and drive. The only exception being, putting yourself at a health risk, does not usually kill somebody else. So there is a little room for arrogance, except when you ask me to share the cost of that choice of lifestyle. Those that cost the system more should pay more – and that includes gender (women)- and it does cross gender. In auto insurance, men pay far more then women in a young age category, because it has been shown in claims – they cost more. In health insurance, it is a fact, women cost more, and it does not stop at menopause – it continues. In the gender cross over, an obese man, poor diet, lots of stress, is going to cost more (due to the potential of heart disease and diabetes, and other related issues. A healthy woman will cost less than a unhealthy male, and an unhealthy female will cost more then a healthy male. You can see how this goes on. Where do you draw the line – simple economics or factored incidents that could be genetic (non-preventable) versus a person with no heavy genetic problems. – – oh, I forgot, what happens if an accident happens though no fault of the victim vs someone who drinks too much and is both a health risk and auto insurance risk. This sounds like an endless spin. However, what has happened, we are now recognizing how we all have responsible roles when the cost of the resource (healthcare) could be attributable to how we choose to conduct ourselves (regarding health expenses). Solutions are not simple in healthcare – but again, now that we are laying all of the issues of cost on the table – and we are being taxed (the mandatory requirement of having a health insurance plan) we can begin to sew the pieces of the quilt together with a much better idea of most of variables we can control, and those we cannot. The ignorance, or the arrogance, that it can be solved in one sweep of an legislative pen, is a clear signal that we have a lot of problems to tackle including mental health.

    • Allan (formerly Al) says:

      “except when you ask me to share the cost of that choice of lifestyle.”

      Insurance is not supposed to transfer funds from one group to another. It’s purpose is to buy or sell risk. If you think that the premium is to high a price to pay for offsetting your risk then you should find another policy that suits your needs. The market will eventually create a fairly even handed insurance policy.

  11. David Lenihan says:

    Women are smarter than men.
    Women are more mature than men.

    I know this is true because both of my wives told me so. It makes sense that women would want to pay the same premiums as men because they know they spend more than we do on healthcare…and thus game us yet one more time.

  12. Don Levit says:

    Most figures I have seen show that 10% of the insureds use about 80% of the benefits.
    We do not know for sure, on an individual basis, who will be in the 10% each year.
    The ACA provides a 3 to 1 age ratio, but also provides states the option of designing lower ratios.
    Why not have each family member pay, initially, fully community-rated premiums.
    Then each month, those who are not making claims, receive a small discount.
    For a family of 4, there may be 3 people receiving the discount each month.
    Over 36 months, the majority of the entire group of insureds, of one risk pool, would be receiving discounts of up to 60% off of their initial premium.
    The 10% of high utilizxers are getting a price beak, too, paying at a 1 to 1 ratio, rather than a 3 to 1 ratio.
    Their total premiums, either for a family or for a group, will be lower than traditional plans, much lower.
    Don Levit

    • Devon Herrick says:

      Hi Don, please allow me to take (a small) exception to your statement…

      Most figures… show that 10% of the insureds use about 80% of the benefits. We do not know… who will be in the 10% each year.

      If insurers really didn’t have any idea who would fall into the 10%, there would be no need for medical underwriting. For instance, insurers know middle-age people with hypertension, excess bodyweight, high cholesterol and high blood glucose, and a past history of claims, are more likely to have medical claims than young adults.

      Middle-aged people with pre-existing conditions also seem to have an inkling they will need more medical care; as a result they prefer comprehensive coverage. Were this not the case, there would be no problem with adverse selection.

      It’s only because some individuals are obviously of higher risk that community rating (enforced by an individual mandate) is being regulated.

      That said, wouldn’t another way to accomplish the goal you outline in your comment above also be accomplished by, say, making the individual mandate apply only to community-rated, high-deductible plans? Comprehensive coverage for medical costs below a high-deductible (say, $10,000 per family) could be medically underwritten (as would costs above, say, $250,000).

      I’m not in favor of an individual mandate to purchase community-rated comprehensive coverage. My reason (beside valuing liberty) is because of the perverse incentives associated with cross-subsidies and mandatory benefits. However, I would find an individual mandate much less worrisome if the mandate only required a high-deductible plan (with an annual or lifetime cap on benefits) sufficient to cover a large majority of the public. I don’t believe community rating is compatible with a stable market for risk. However, if community rating only applied to a portion of the policy, I would find it less objectionable.

      • Don Levit says:

        Devon:
        I think what you say makes a lot of sense except for 2 facts:
        1. There is no medical underwriting.
        2. The policies have no lifetime or annual limits.
        Under those constraints, I believe fully community-rating the product will still provide competitive premiums, initially.
        And, by providing discounts based on actual claims experience, the family will come out way ahead, over time, compared to traditional insurance premiums. This is because the 10%-80% “rule” will be honored for each family, as long as they are able to meet those “general” parameters. Only the 80%er will be paying fully community-rated premiums. The family as as group will be paying much less than traditional pay-as-you-go premiums. If each family member has high claims each year, they are still getting a break on premiums by paying a 1 to 1 ratio, rather than a 3 to 1 ratio.
        Being sick or injured is bad enough without having to pay experienced-rated premiums, to boot. Insurance is about subsidizing everyone, due to the pooling advantage of large numbers.
        Don Levit

  13. LAC says:

    The answer is a resounding NO. It is well known that women earn less than men, live longer with fewer dollars to spend.

    • Allan (formerly Al) says:

      What does earning less have to do with insurance? Are you saying that women should be able save money on insurance so they can drive in a fancier car?

  14. Wanda J. Jones says:

    John and Friends:

    Note how all of us bought into the notion of “health insurance” with companies creating rates for various customers. Meaning, the present meta policy goal is to so destabilize the present insurance system that people beg for single payer. In which, with the mindset in this set of government functionaries, the prices will be set centrally, and therefore politically. Enjoy this argument while you can.

    As for women paying more, recall a fundamental: only women go through menopause, which brings clusters of chronic conditions with their respective specialists, visits, charges, medications, and admissions. Men end up with hypertension, heart disease, and a few more, but can reach their eighties in perfect health. In other words, I think women should pay more.

    The only benefit that should be charged equally is maternity.

    Cheers…

    Wanda Jones
    (herself, not the company)

  15. Janice Michaud says:

    As an HI agent/underwriter I already miss the joy of finding the risk in premiums and having pointed and factual conversations while educating clients.
    As an example: a child who has taken antibiotics 3 or more times for ear infections would be rated or declined because of the near certainty of having tubes inserted. The facts are teased out of experience and sized up with cost. The necessity of explaining/hearing probability and price empowers consumers and supports a context to define health and financial risk.
    In my experience, it’s imperative that reality, risk and costs are palpable for human cognitive functioning. Otherwise indecision and inaction prevail; the purpose served is servitude/dependence.
    Insurance is risk transfer, and must reflect reality as much as possible to be an effective financially and as a risk mitigating tool. Insurance companies, in the past, have had to attract and maintain customers, with the choice to participate or not to participate. Participating in health insurance has been voluntary.
    Government, by contrast, must obscure reality to be effective in using force, and promoting servitude/dependence.
    If you think insurance is an arbitrary read “Against the Gods” by Peter Bernstein.
    I hope that reality wins out (and the best of our insurance and medical institutions survive) … in the lifespan of my career, in my lifetime, or in my children’s lifetime at least.

  16. Linda Gorman says:

    Second the recommendation for “Against the Gods!”

    Should be required reading for anyone who plans to have an opinion on how any insurance or financial market should be regulated.

  17. Glenda G. Hays says:

    I know for a fact that more women see their doctors for a lot of things but i think it’s kind of unfair to have them pay higher premiums for health insurance. I honestly think men and women should pay equal amounts when it comes to insurance premuims regardless if they often see a doctor or not.

    SturdevantAgency.com

  18. Adriene O. Dube says:

    Women may see the doctor more often than men but most men earn higher incomes than women so i think it should just be equal. I don’t think women have to pay higher premiums for health insurance just because they see the doctor more often. It’s kind of unfair. Everybody gets sick, regardless of gender.

    • Allan (formerly Al) says:

      If you are correct then to be consistent you would have to advocate that large men should not pay more for basic life sustaining food than small women especially those that earn more than those men. Everyone needs to eat, regardless of gender.