Gender rating: is it discrimination or simple math?

Riding the coattails of the federal Affordable Care Act, Rhode Island lawmakers are considering major steps to eliminate “gender rating” in the state’s health-insurance industry. The practice, which has been called everything from “discriminatory” against women to “simply data-driven,” could be eradicated in the Ocean State by 2015, under a Senate-passed bill.
On May 14, the Senate unanimously passed a bill that would effectively piggyback on ACA provisions that will prevent health-insurance companies from gender rating in individual policies or for small groups with up to 50 covered by 2014. The bill must now be approved by the House.
The Senate bill’s sponsor, Sen. V. Susan Sosnowski, D-South Kingstown, said the legislation would prevent insurance companies from viewing an individual’s sex as a “pre-existing condition.”
“It should be equal protection, and it should be equal fairness for all when it comes to insurance. The way it’s gone all these years doesn’t make any sense to me,” she said.
In the context of the Rhode Island bill, gender rating is the practice of charging women higher health-insurance premiums during their child-bearing years. According to Monica Neronha, vice president of legal services for Blue Cross & Blue Shield of Rhode Island, the rationale is that women in that age range (20 to 40 years old) tend to use health care services more than men in the same age group.
“It’s establishing a rate based on someone’s gender. It’s not an uncommon practice in the insurance industry. Life-insurance rates, for example, vary based on age and gender,” she said. “Women get lower life-insurance rates because they have a different life expectancy. Similarly, women have lower motor-vehicle premiums because they are safer drivers.”
The National Women’s Law Center sees the practice as overtly discriminatory toward women. The Washington, D.C.-based nonprofit researched gender ratings in every state using data gleaned from eHealthInsurance.com, a public company that lists sales quotes for a variety of health-insurance plans. The NWLC published its findings in a report entitled, “Turning to Fairness: Insurance Discrimination Against Women Today and the Affordable Care Act.” Data on Rhode Island health-insurance plans was not available. Danielle Garrett, a NWLC policy analyst and primary author of the report, said a major problem with gender rating has to do with consistency.
“Some very-similar plans in the same state will charge different amounts – one will charge 25 percent more, and the other will charge 50 percent more,” she said.
Garrett indicated that insurance companies point to maternity coverage as a reason for gender rating. “However, in our report, the plans we were looking at didn’t cover maternity care, so that’s not a real answer,” she said.
Blue Cross & Blue Shield’s Neronha said insurance companies aren’t targeting women in this age group in any discriminatory fashion. She indicated that the practice is the result of in-depth actuarial analysis.
“It’s not driven exclusively by the fact that someone is a male or someone is a female,” she said. “It’s driven by underlying data that explains how services are utilized at certain ages by a particular sex.”
Local health insurers are starting to prepare for what might happen when gender rating is eliminated. According to Neronha, when Blue Cross submitted its rate filings in April, it did so in anticipation of “the elimination of gender rating because federal law requires that.”
Tufts Health Plan did not include gender as a rating factor in its ACA small-group filing but has no plans to change its large-group rating practice, according to Sonya Hagopian, vice president for corporate communications and public relations.
According to the NWLC, a number of states – including Massachusetts and Maine – have prohibited gender rating for group health plans and in the individual market. Anna Benyo, a senior policy analyst for the nonprofit, said the results have not been catastrophic for the health-insurance industry. •

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