A piece of Colorado legislation seeks to even the health insurance playing field for women.
Most insurance companies charge more for women in the individual market. Women pay between 2 percent and 59 percent more than men who are the same age, from the same geographic region and in the same general health.
“And in some cases, they pay more than men who have higher risk factors,” said Kelly Shanahan, policy director for the Colorado Consumer Health Initiative. “We found cases where non-smoking women still paid more than men who smoke.”
But House Bill 1022, sponsored by Sue Schaffer (D-Jefferson) seeks to change that, forbidding insurance companies to use gender as a factor when deciding premiums for the individual market.
“That market is a little bit like the Wild West,” Shanahan said. “They can already refuse you coverage. Most companies don’t offer maternity insurance in that market. They can charge more because they found out your mother had a problem; you might have it too. It’s already left largely up to their discretion.”
The problem doesn’t belong to Colorado alone.
The National Women’s Law Center discovered that gender issues in health insurance premiums are rampant throughout the country. For instance, some insurers reject women who are survivors of domestic violence.
“Women are charged more for coverage simply because they are women,” said a report from the center, titled Still Nowhere to Turn, “and individual market health plans often exclude coverage for services only women need. In short, in the health insurance system, being a woman amounts to being treated like a ‘pre-existing’ condition.”
While researching the individual market throughout the nation, the center found that 95 percent of insurance companies rate premiums based on gender.
And younger women are paying the most: A 25-year-old woman can be charged up to 84 percent more than men the same age — in plans that exclude maternity coverage.
But the bias didn’t stop there.
According to the report, more than 60 percent of plans charge a 40-year-old woman who doesn’t smoke more than a 40-year-old man who does. Women who don’t smoke are charged between 1 percent more in some states and 63 percent more in others.
New research revealed the extent to which gender rating can also occur in the group health market,” the report said. “Where insurance companies are allowed to determine premiums based on the number of women a business employs, meaning that predominately female work forces end up paying significantly more for coverage.”
Montana is the only state that bans gender rating across all health insurance markets and for groups of all sizes. About 15 other states ban gender rating in the small group market, those businesses with 50 or fewer employees.
Colorado isn’t the first state to attempt to ban the practice in the individual market. Arkansas passed a law during 2009 that banned the practice of using domestic violence as a reason to deny coverage; and California became the 11th state to ban gender rating in the individual market.
“The biggest part of the problem is that women don’t know they’re being rated by gender,” Shanahan said. “You’d have to know you were being gender rated before you could shop for insurance companies that don’t practice it.”
And the way the individual market works, means women often are the subject of “double dipping,” she said.
“In the individual market, they can choose not to cover part of you that’s had trouble before — kidneys, for example,” she said. “So if you’re a woman who’s had kidney stones, they charge you even more. And it’s a global problem, scientifically proven.”
Insurance companies that practice gender rating don’t deny the practice. They say it’s a necessary part of doing business.
“Women at a certain point in their life use the health care system more than men,” said Rebecca Weiss, government liaison for Anthem Blue Cross and Blue Shield. “It’s totally in the individual market — decisions are different there. Risk is different. There’s a higher cost associated with women’s health care.”
Anthem rates for age and for gender, she said.
“It’s based on how much medical care is used,” she said. “But it’s only one of the things we use. We look at the big picture.”
But some consumer advocates said that philosophy punishes women who do the very thing that most insurance companies want their clients to do — seek preventive care.
“Women are going to the doctor, getting these screenings, and now they’re being punished for it,” said DeDe DePercin, executive director of the Colorado Consumer Health Initiative. “Insurance companies say they want the screenings, want to catch it early, but when women take advantage of those screenings, they are charged more. It’s punitive.”
If the bill passes, Weiss warns that everyone in the individual market could pay higher premiums.
“Someone who uses more services would pay less, but people who don’t use as much might pay more,” she said. “There’s going to be a cost shift spread among everyone. There’s going to be a big impact.”
Weiss said that young men, ages 25 to 35, would see an increase in their individual premiums. Because men that age don’t go to the doctor as often as their female counterparts, their premiums are less.
“It’s like car insurance,” she said. “When you look at statistics, you find that males in a certain age bracket are more likely to have accidents, so they pay more for auto insurance. It’s the same issue with health insurance. At certain points in life, women are going to pay more in that market.”
Young men might even drop out of the individual market, she said, if their rates go higher because the companies can no longer rate for gender.
“It might be that they say the cost of the program isn’t worth it to them any longer,” she said.
Not all insurance companies rate for gender, however.
“Kaiser Permanente Colorado has never in its history rated for gender,” said Amy Whited, spokeswoman for the company. “And we don’t do it now.”
Kaiser does not offer an individual insurance product in Colorado Springs, but the company offers individual insurance in Denver.