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AIS's Health Business Daily
Featured Story Nov. 2, 2009
Insurers and Industry Critics Use Charges of Gender Bias to Call for Health Reform Law Reprinted from HEALTH PLAN WEEK, the industry's leading source of business, financial and regulatory news of health plans, PPOs and POS plans. By Jill Brown, Contributing Editor,
Charging that some insurers deny coverage to women who are victims of domestic violence, some health insurance industry critics contend that such gender discrimination is a primary reason why lawmakers should pass federal health reform legislation. Regulators and insurers, however, assert that domestic violence is not an issue in underwriting or enrolling individual members, but they do concede that women of childbearing age are charged higher rates and face exclusions and riders for maternity care. And like their critics, health insurers also are using the issue of gender bias to call for a health reform bill — but one in which guaranteed-issue coverage is coupled with a strong individual mandate.
At an Oct. 15 Senate Health, Education, Labor and Pensions (HELP) Committee hearing on gender discrimination by health insurers, Marcia Greenberger, co-president of the National Women’s Law Center, charged that “in eight states and the District of Columbia, insurers are allowed to use a woman’s status as a survivor of domestic violence to deny her health insurance coverage.”
Those eight states — Idaho, Mississippi, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota and Wyoming — do not have laws that specifically ban insurers from considering domestic violence-related injuries as a pre-existing condition, she asserted. But insurance commissioners are working to assure consumers and lawmakers that health insurers are not denying coverage to victims of domestic violence.
In an op-ed article in the Greenwood (Miss.) Commonwealth, Mississippi Insurance Commissioner Mike Chaney (R) said that “as commissioner of insurance and as a former legislator, I have worked closely through the years with advocates for victims of domestic violence, and insurance denial has never been an issue.” He added that “as insurance commissioner, I would not tolerate any such denial if such a denial ever occurred.”
The Washington, D.C., Department of Insurance, Securities and Banking (DISB) on Oct. 14 issued a bulletin warning insurers that they are prohibited from using domestic violence or spousal abuse as a deciding factor when issuing life or health insurance policies.
At the hearing, Sen. Richard Burr (R-N.C.), a HELP committee member, said his state’s insurance commissioner told him that “we would know if a company tried to use domestic violence as a pre-existing condition” because health insurers must list exclusions on the insurance application. Burr said North Carolina Insurance Commissioner Wayne Goodwin (D) reported that there also have been no consumer complaints related to denial of insurance coverage for victims of domestic violence.
In addition, Burr contended that the National Women’s Law Center based its assertion on data that are “almost 20 years old.” He pressed Greenberger to cite specific instances where women have been denied coverage because of domestic violence incidents.
Greenberger countered that “because of the way insurance companies deal with this issue in particular, they will often deny the coverage for victims and survivors of domestic violence without saying that that’s the reason.”
Ethan Slavin, spokesperson at Aetna, Inc. — one of nine insurers that a Sept. 14 Huffington Post article said deny or cancel coverage for victims of domestic violence — said that’s not the case. “Aetna does not treat domestic abuse as a pre-existing condition,” he tells HPW. “We don’t consider it at any point during the application process, during claims, for premiums or cancellations.”
The National Association of Insurance Commissioners (NAIC) in 1999 developed a model law to address unfair discrimination against subjects of abuse in health benefits plans. “I don’t know how extensive the problem is,” concedes Sandy Praeger (D), Kansas insurance commissioner, NAIC’s immediate past president and chair of the NAIC Health Insurance and Managed Care Committee. Still, Praeger tells HPW that “it was a big enough issue that we felt that we ought to address it.”
She contends that federal health reform legislation should prohibit insurers from using pre-existing conditions and rating factors aside from geographic location, age and tobacco use. “It would just make insurance operate in a more equitable fashion,” she says.
Insurers Cut Benefits, Raise Rates for Women
Insurers concede that it is a common practice to charge women of childbearing age higher rates for individual policies and to add riders for maternity care. Peggy Robertson, a Colorado resident who also testified at the Senate HELP committee hearing, said UnitedHealth Group subsidiary Golden Rule Insurance Co. denied her application for individual insurance because she had had a C-section in 2006. “I called Golden Rule, and they said that if I would get sterilized, they would then be able to offer insurance to me” without a maternity-care rider, she told the panel. After complaining to the Colorado Division of Insurance, “I discovered that Golden Rule is allowed to discriminate against women who have had a C-section. There was nothing I could do.”
“I found that bone-chilling,” responded Sen. Barbara Mikulski (D-Md.), who chaired the Senate HELP committee hearing. “I find it offensive and I find it morally repugnant.”
Golden Rule spokesperson Ellen Laden says she cannot comment on Robertson’s case because of HIPAA privacy rules. But she tells HPW that “in all of the states in which we do business, Golden Rule offers coverage to women who have had previous C-section deliveries.” She adds that C-section deliveries cost an average of 42% more than vaginal deliveries, and that the risk of a subsequent C-section is 90%. “We are able to offer coverage to women who have had prior C-section deliveries by increasing premiums to cover the increased risk or by using exclusionary riders,” she says.
Slavin says Aetna does not treat a previous C-section as a pre-existing condition. But, he says, “men and women use health care services differently and, therefore, are charged different premiums when they purchase health insurance in the individual market” in states where such rating is permitted. “Our claims experience has shown that at older ages (typically beginning around ages 50 to 55), men generally utilize more services than women, and thus they are more likely to pay higher premiums for health insurance. At younger ages, however, women typically use more services than men, and therefore have higher premium costs.”
One reason why insurers institute such rules is because otherwise, enrollees are tempted to get insurance shortly before becoming pregnant and then cancel it after the delivery, says J.P. Wieske, director of state affairs at the Council for Affordable Health Insurance. “We do know people wait until they’re sick to sign up for insurance,” he tells HPW. “That kind of gaming of the insurance system has a cost. And we see that in New York, where the rates are double what they are in the neighboring states,” because New York has community rating.
In fact, another consumer who testified at the Senate HELP committee hearing said she did just that kind of in-and-out move. Idaho resident Amanda Buchanan said her individual policy from Regence BlueShield of Idaho had an additional maternity deductible of $5,000, plus 20% of all remaining costs.
“My husband and I came up with a plan: I would have a baby, then take myself off of insurance and use the money I’d save to pay down our medical debt,” she said. “And this is exactly what we did.”
Laden, Slavin and Praeger all say this practice illustrates the need for comprehensive health reform. But while Praeger calls for stronger consumer protections in the individual market, Laden and Slavin say what’s needed is guaranteed-issue rules that are coupled with a strong individual mandate. “That would allow insurers to cover all who seek coverage without regard to health care status and without any pre-existing condition exclusions that are used today,” Slavin says.
A new California law barring health insurers from charging different premium rates based on gender ultimately could raise rates, warns Patrick Johnson, CEO of the California Association of Health Plans (CAHP). A.B. 119, signed into law by Gov. Arnold Schwarzenegger (R) on Oct. 11, simply “will redistribute the price of care so that…young women will be charged less and young men will be charged more.”
He asserts that “this trend only makes sense if the insurance pool is large enough to spread the risk widely. No one is currently required to obtain health insurance. If some people (based on age or gender, for example) are paying less than their risk in the pool, then others may decide against buying insurance that costs more than their risk factors indicate that it should.” |
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