A Senate committee meets today to mark up a compromise unisex insurance bill intended to mandate equal premiums and equal benefits for men and women while at the same time relieving the insurance industry of some of the economic burden of revamping its business.
As of late yesterday, the bill's co-sponsor, Sen. Robert Packwood (R-Ore.), predicted the vote would be "nip and tuck, too close to call." One source said six senators favored the Packwood version, six were against it, with four undecided and one abstaining.
The lineup on the eve of the mark-up session indicates there has been a major shift on the issue of unisex insurance. Last December, it was perceived primarily as an equity issue and enjoyed general support among committee members as well as civil rights and feminist organizations. Today, after the American Council on Life Insurance turned against the unisex bill and a group of giant insurance companies launched an intense lobbying campaign, more legislators are viewing unisex insurance as an economic issue.
Committee aides contend that the question has become less what is legally fair than how much insurance costs will go up if sex is no longer a criterion for setting rates. The two sides are billions of dollars apart on the cost estimates.
One industry group has spent close to $1 million to advertise and send out 500,000 letters to consumers opposing the bill on economic grounds. Women, the industry says, will collectively pay $360 million more a year for life insurance and $700 million more for auto coverage.
Another industry organization claims that "single men will be forced to buy maternity benefits for themselves in their health insurance." They claim that if pregnancy costs were automatically included in policies, young men, who now pay less than women, would be paying for a benefit they don't need when their rates are raised to equal those of women.
The National Organization for Women contends that women over their lifetime now pay an average of $15,732 more than men for comparable insurance coverage.
The bill as originally introduced would have required retroactive revision of pensions to raise benefits for women, who live longer on average than men, to the same level as men's. Packwood's compromise would not require that the benefits of retired persons be equalized. All existing insurance contracts and future contracts, however, would have to charge men and women the same premiums and offer them the same benefits.
The substitute bill does not state how equality is to be achieved in existing policies. It would be left up to the insurer whether to "top up" the rates and benefits of the disfavored sex to the level of the favored sex or to blend the rates at mid-point. For example, if a male received $1,000 in benefits and a female $800, the alternatives would be to raise the female to $1,000 or give them both $900.
Insurance industry spokesman George Bernstein faults the Packwood proposal, saying that if a man's benefits were reduced, he would be entitled to sue the insurer for breaking the contract guaranteeing a certain sum. He accused the legislators of trying to avoid the ire of constituents by leaving it up to the insurance companies to decide whether to raise rates or lower benefits to achieve equality.
Sen. James Exon (D-Neb.) is expected to introduce an amendment exempting individual insurance policies. Since most employer-related group policies are already sex neutral, the effect of the amendment, according to Mary Gray of the Women's Equity Action League, would be to gut the unisex bill. Bernstein said a majority of the insurance companies favored the Exon approach.