Gender and Insurance

In a post the other day, Elizabeth Edwards made the point that individual markets in health insurance, à la John McCain's proposals, would be disadvantageous to women. For whatever reason this doesn't seem to get talked about much, but there's a significant gender disparity in health care costs and that plays a role in thinking about insurance in a variety of ways.

For example, in a world where everyone must buy insurance, and insurers must sell insurance to all customers at a flat rate, you have a strong incentive to try to attract a disproportionately male client base -- lots of ads on Spike TV and sports programming, no ads on Lifetime or Gray's Anatomy. How big a deal that would prove to be in the end is hard to predict in advance, but in general any system that involves consumer choice and for profit insurance firms is going to encourage people to design plans that better-fit the desires of men than of women.

Comments

They should have thought about that before choosing to grow ovaries instead of testes.

Posted by lfv | June 26, 2008 1:30 PM

but there's a significant gender disparity in health care costs

Is this a disparity because of discriminatory behavior by health practitioners, or because women statistically tend to require more in the way of hospital visits, or life longevity effects?

Posted by dry_fish | June 26, 2008 1:35 PM

I believe the ladies call it "Grey's Anatomy".

Posted by anon | June 26, 2008 1:36 PM

but in general any system that involves consumer choice and for profit insurance firms

Can we correct this to say, "any system that involves consumer choice and for-profit insurance firms and price controls is going to encourage people to design plans that better-fit the desires of men than of women"?

Some people feel we should do away with price controls.

Posted by mk | June 26, 2008 1:50 PM

Is this a disparity because of discriminatory behavior by health practitioners, or because women statistically tend to require more in the way of hospital visits, or life longevity effects?

Are insurance company executives deliberately screwing women, cackling and twisting their mustaches as they do so? Probably not.

Still, this is a problem that needs to be addressed, even if nobody is acting out of pure malice.

Posted by Matt Stevens | June 26, 2008 1:54 PM

"How big a deal that would prove to be in the end is hard to predict in advance"

Well, that is almost precisely the German system. I would think you could make some very accurate projections from the German sickness fund model.

Posted by Stephen | June 26, 2008 1:59 PM

Hey! I watch Grey's Anatomy!

Posted by Cliffy | June 26, 2008 1:59 PM

Still, this is a problem that needs to be addressed, even if nobody is acting out of pure malice.

We're talking about health insurers. The people whose profitability depends upon denying coverage. "Pure malice" is a start.

Posted by Jeffrey Davis | June 26, 2008 2:00 PM

"Is this a disparity because of discriminatory behavior by health practitioners, or because women statistically tend to require more in the way of hospital visits, or life longevity effects?"

It's a bunch of little things. First, of course, is the fact that women get pregnant, and that costs a lot of money.

But even policies with a pregnancy exclusion are more expensive. Why? Well, two main reasons. First, women tend to get more preventative care. That costs money too, and the savings from it tends to be realized when the same women are Medicare-eligible. Second, women under 65 are susceptible to more cost-intensive diseases. If men under 65 have a catastrophic illness, it's usually heart attack or lung cancer -- which kill you so quickly that they don't cost a lot. Women tend to get breast or ovarian cancer, which often requires many years of treatment.

Posted by Joe | June 26, 2008 2:04 PM

More curious is how insurance companies will dissuade high risk buyers of their products. What will be the strategy for selecting out or discouraging smokers, the obese, those suffering preexisting conditions, those with a known genetic marker for disease, workers in dangerous occupations and others prone to disproportionally impact costs? Some southern states have very high rates of people simultaneously possessing three deadly conditions; obesity, nicotine addiction and diabetes. Do you skip advertising in Mississippi or Alabama altogether?

Posted by steve duncan | June 26, 2008 2:04 PM

Matt Stevens, surely we do need to address all sorts of health care issues: it's a big reason why I supported John Edwards back in tha day.

The question wasn't rhetorical...I'm just trying to understand the cause of the disparity better.

Posted by dry_fish | June 26, 2008 2:04 PM

Why would this be limited to advertising?

Why wouldn't any profit seeking company pursue a reputation for doing the bare minimum allowed by law, and even then only grudgingly, for the demographic groups they want to exclude?

Posted by theCoach | June 26, 2008 2:17 PM

Yeah. Gender disparities in insurance are always in favor of men. That's probably why I pay drastically more in car insurance than my sister, despite the fact that I have a perfect record and she's had a speeding ticket and been in an accident.

Posted by dalliance | June 26, 2008 2:24 PM

We don't have a problem with auto insurers or life insurers discriminating by sex, because we understand that there are legitimate reasons to do so. So why all the hand-wringing over the idea of health insurers doing the same?

Posted by Brandon Berg | June 26, 2008 2:27 PM

Auto insurance is more expensive for men than for women, and more expensive for the young than for the old. There is not, nor should there be, any civil rights outcry. There is as well not a shortage of insurance targeted at young men (i.e. Erin Esurance)

Posted by Kolohe | June 26, 2008 2:28 PM

TheCoach,

The reason it could be limited to advertsing would be that such discrimination against actual policyholders would potentially be actionable under a whole host of laws (notably bad faith, fraud, ERISA, civil conspiracy, antitrust and RICO) unless they were very up front about it. Being up front is problematic because then the company opens itself up to Quo Warranto/regulatory actions for defying the community rating rules that are prompting the evasions in the first place.

Mr. Berg,

Maybe we should have a problem with all sex discrimnation by insurers. Medical insurance could be distinguished from the others though because it, unlike life insurance, is frequently a matter of life and death.

Posted by jalrin | June 26, 2008 2:43 PM

Comment on the politics of the statement:

I believe it is true that a lot of women really like Elizabeth Edwards, sympathize with her medical plight, and identify with her. If she keeps coming out with statements like this about McCain's policies she could be a powerful force to sway women's votes.

Posted by Daddy Love | June 26, 2008 2:49 PM

Hmm, do insurers really justify higher premiums because of potential pregnancy costs?

The Lord knows I'm no feminist (excepting when I'm faking it to impress a date) but why do health insurers get a waiver from Civil Rights laws, which otherwise protect against discrimination based on pregnancy status?

I've been under the impression that males do play a small (but crucial!) role in the miracle of life. If there's a pregnant woman, you can usually count on there being an impregnating man somewhere in the equation. And when there's not, the insurer could easily justify higher premiums for covering in vitro fertilization, which is only about 1% of the 6 million annual pregnancies.

Since the rest of the pregnancies occur the old school way, why charge half the population higher premiums when the other half is equally responsible for the expense? And that's for consensual sex. As it happens, the lower premium gender correlates rather strongly with the gender solely responsible for nonconsensual sex.

Of course, for married couples the premium disparity is a financial wash, so the discriminatory effect only hits single mothers while subsidizing single fathers. Odd policy that.

Posted by beowulf | June 26, 2008 2:52 PM

Jeffrey Davis:
We're talking about health insurers. The people whose profitability depends upon denying coverage. "Pure malice" is a start.

If that's what you believe you're an idiot.

Posted by AB | June 26, 2008 2:56 PM

"Is this a disparity because of discriminatory behavior by health practitioners, or because women statistically tend to require more in the way of hospital visits, or life longevity effects?"

What difference does it make?
This is the fundamental stupidity of retaining insurance.

Look, what is the goal here?
If the goal is that we take it to be a social right that we all have some minimum guaranteed level of healthcare, then why do we need insurance companies?

If we take the goal to be that that everyone is "supposed to pay for whatever their medical costs happen to be" then again, why do we need the insurance companies?

What the insurance companies do is some sort of bizarre bunching of certain classes of people into buckets that all pay the same amount for health, but the way the buckets are chosen is essentially random; it's certainly not based on morality or social welfare. The closest analogy I see to the system is the way strong corrupt unions in parts of Europe have created a system that works well for them, and screw the young unemployed. Of course it's largely the exact same group in the US who condemn those unions who are most supportive of the current insane US health insurance system.

Posted by Maynard Handley | June 26, 2008 3:26 PM

If anyone actually read the LA Times article Edwards links to, it actually shows that, over their lifetime, *males* pay far more in insurance than females. Now, I don't have any problem with that, but it's worth noting that the entire premise this discussion is based on is wrong from the start. It should also be noted that men pay more for car insurance, life insurance, etc.

Actuarial tables are what they are. All insurance does is remove variance - it's not intended to smooth the expected value of health spending across the whole population! You might think that's a lofty goal, but I don't know why you'd call it insurance, and I don't know how you'd ever expect private companies to make it profitable.

Posted by cure | June 26, 2008 3:28 PM

jalrin,
Certainly there will be some companies that have better reputations than others in certian areas of coverage. If having a bad repuation for covering certain demographics is profitable, there is an incentive to get that reputation. Of course this could be balanced by heavy handed regulation, but what is the point of keeping the insurance private at that point?

"I don't know how you'd ever expect private companies to make it profitable."

cure, I think that is the point.

Posted by theCoach | June 26, 2008 4:07 PM

Don't women pay more in health insurance because they use the health care system more? There doesn't seem to be anything discriminatory about it. I don't see hand wringing over higher life or auto insurance by Matt*. Yes, women will be targeted less if legislation forces prices for men and women to be the same. However, you'd find that men would be targeted less for auto and life insurance if you forced those insurers to take gender off their actuarial charts.

* Of course, Matt has come out in favor of denying men the right to vote.

Posted by Mo | June 26, 2008 4:08 PM

Matt,

As Roissy would say, all these ostentatious shows of concern about feminist issues are very beta game.

Posted by Steve Sailer | June 26, 2008 5:01 PM

but in general any system that involves consumer choice and for profit insurance firms is going to encourage people to design plans that better-fit the desires of men than of women.

Speaking as a guy, that's reason for me to support McCain, now isn't it?

While there are, admittedly some guys who think that - by mouthing pro-feminist platitudes - they will get lald; I'm sure that the vast majority actually agree with me.

Posted by McGump | June 26, 2008 6:15 PM

"
but in general any system that involves consumer choice and for profit insurance firms is going to encourage people to design plans that better-fit the desires of men than of women.

Speaking as a guy, that's reason for me to support McCain, now isn't it?
"

Hmm. Aren't the GOP all about christianity? And doesn't christianity have something to say about transcending the mundane, about being larger, better people than our mere economic interests?

I guess it comes as no surprise that, when you scratch a Republican, you get a selfish a-hole. What is surprising is when they let the public mask of "compassionate conservatism" slip.

Posted by Maynard Handley | June 26, 2008 6:24 PM

How big a deal that would prove to be in the end is hard to predict in advance

And even harder to predict in retrospect.

Posted by urbino | June 26, 2008 7:44 PM

Hmm. Aren't the GOP all about christianity? And doesn't christianity have something to say about transcending the mundane, about being larger, better people than our mere economic interests?

Applying such logic we reach the conclusion that women should favor health care policies that benefit men.

Posted by FitzHugh | June 27, 2008 1:30 AM

Insurace companies could split the costs of pregnancy between the policies of both parents.

Posted by Joseph | June 27, 2008 11:01 AM