Anyone who has been turned down, or felt victimized, by health insurance companies should be relishing the spectacle of that industry in retreat.
It is a rare sight indeed to see an industry leader ask for greater government regulation. At a Senate Finance Committee hearing Tuesday, America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni did just that, saying her members “accept the premise that the system is not working today and needs to be reformed.”
The industry has been backpedaling furiously to forestall its worst nightmare: a Medicare-style public plan that potentially could drive private insurance companies out of business. It has been renouncing some past business practices that have been lucrative, and what many consider heartless.
In November, AHIP said its members would accept customers with pre-existing conditions if everyone were required to obtain health insurance. In March, it offered to stop charging those sick people more than healthy policyholders.
AHIP’s latest concession is to stop charging women higher premiums than men. Women who get health insurance from their employers are protected by federal law from this disparity, and also must be offered maternity benefits. But the 7 percent of women who buy health insurance directly have been charged 25-50 percent more because they use more health care services than men. And those policies did not even cover maternity expenses, which are available at an extremely expensive surcharge. Such practices no doubt contribute to the fact that 26 percent of Texas women are uninsured.
Sen. John Kerry, D-Mass., who has filed a bill to end the practice, said during the hearing, “The disparity between women and men in the individual insurance market is just plain wrong, and it has to change.” Ignagni agreed.
Many state insurance pools that cover high-risk residents allow gender to be considered in setting rates.
This so-called “individual market” insurance largely falls under state regulation, which is cursory in most states. One medieval example: It is legal in nine states and the District of Columbia for insurers to reject domestic-violence victims. In some states, insurers can reject those who have had a cesarean section.
At one time, the insurance industry charged racial minorities more for health insurance because they had poorer health outcomes. Why gender disparities have been allowed to persist is beyond comprehension. It is especially egregious given that women earn less than men.
Even if the public insurance plan does not come to fruition, its threat is forcing significant and long-overdue private health insurance reform. Now that is progress.
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