It's really true: Women pay drastically more than they should for health insurance. The industry claims that women deserve to pay more because they cost more to cover. But the published data behind this claim won't withstand scrutiny. The books look cooked; someone ought to sue.
Happily, someone has. In Washington, D.C., the National Organization for Women just brought a landmark lawsuit against Mutual of Omaha, complaining that its sharply higher rates for women violate the District's public-accommodations law, which specifically abjures insurers not to discriminate on the basis of sex.
If NOW wins -- and I'm cheering for it -- cases could be brought in other states. A series of wins would save a fortune for married couples and single women who have no employer-paid health insurance, and so have to cover themselves with individual policies. Right now, a woman's health insurance -- even without pregnancy benefits -- can cost 60 percent more than it costs a man.
At Mutual of Omaha, a woman is charged $1,149 for a medical-expense policy that would have cost a man only $692. A woman's disability policy costs $596 when a similarly situated man would have paid only $313. These high costs mean that many single women and married couples, who have modest income, have to go without good insurance, because they can't afford it. This unfair discrimination endangers their health.
Industry spokesmen agree that it's discrimination, all right, but not unfair discrimination. Women's hospital claims are higher, they say, so it's fair for insurers to charge them more. I concede that I was beguiled by an actuary at an early age and have always had a weakness for their numbers. But it just goes to show you how easily good girls can be led astray. Here are some bitter truths:
(1) The industry's font of wisdom is the Society of Actuaries, which blesses the data on which health insurance rests. But listen to the conclusion of its most recently published study, covering health claims for 1977-78:
"Claim costs for females are lower than those for males above age 50," it finds. "The relationship between male and female claim costs under age 50 is not clear: For some (age groups) costs for males are higher; for others, costs for females are higher." And even when higher, they are only slightly higher.
Actuary Peter Thexton of the Health Insurance Association told my associate, Virginia Wilson, that he thinks the 1977-78 data is peculiar. Earlier studies showed women costing more, he says, and so will the 1979-80 data when it comes out. (The newest data isn't available to be double-checked.)
What I find peculiar is that HIA sent me older data to "prove" its claim that women cost much more, and concealed the newer data that says otherwise. It took some real digging to find the facts.
Mutual of Omaha says its "sound" rating system is based on industry data (but obviously not its latest data) and on internal, company statistics not made public -- hence uncheckable.
(2) The industry's published data is so unscientific that it wouldn't stand up in a high school math class. It's based on information voluntarily given by only six or fewer health insurers, out of nearly 900 companies selling health insurance in America. And it's drawn only from buyers of individual policies, which is a small part of the market. The study is "not a random sample and not without its bias," Thexton concedes.
(3) Statistics on hospital stays show that women go to the hospital more than men, and for a good reason: They have babies more often than men do. Not counting maternity, both sexes are about the same. Yet even without maternity benefits, women's policies are vastly higher-priced. Health statistics show that women stay in the hospital longer for some specific ailments, but the HIA has no comprehensive study.
(4) The vast majority of health and disability insurance is already sold on a unisex basis -- that is, women are charged the same as men. This includes all group health policies, which make up 85 percent of the market (employers would never stand for paying unnecessarily high rates for their employes); 24 percent of the health policies sold individually; 10 percent of the individual disability policies and virtually all of the policies sold to people over age 65 to fill in the gaps in Medicare.
So the industry obviously can prosper on fair and equitable unisex rates. Only the retrograde holdouts still charge women more -- and maybe the lawsuit from NOW will help put an end to it.