Inequities Discovered
Inequity. Right here in River City. That starts with “I” and that rhymes with “sigh” and….oops….sorry….I got carried away. This is from an editorial in The New York Times:
Women are more likely to take prescription medications on a regular basis, more likely to have chronic conditions requiring ongoing treatment, and their reproductive health needs require them to get regular checkups whether or not they have children.
So how much should women pay for health insurance? To the Times editors that’s a no-brainer: the same as men, of course. Yet a new study finds they actually pay….(Hint: What did Oliver ask for?)….MORE.
EXERCISE FOR THE READER: Unisex rates for health insurance would cause men to pay more so that women could pay less. Suppose we require unisex premiums for life insurance. Who would pay more? Who would pay less? Now try the same exercise for disability insurance.
Outrage. Right here in River City. That starts with “O” and that rhymes with “oh?” and….
John:
To appreciate this post, you have to be familiar with “The Music Man” and “Oliver” and also have a sense of humor. Now using the Venn diagram that logicians use how many health policy people do you think occupy the intersection of all three circles?
It’s probably just you and me and I’m not sure about you. (Just kidding.)
Love the connection between Robert Preston, the scam artist conning the rubes in “Music Man” and the editorial writers at the New York Times. How fitting!
John, I think we need to look farther down the road and into the cost that is spent on men later in life when they are sick because they did not take preventative steps to better their health when they were younger. Yes, women do take more prescription medications and because of their reproductive health, they visit the doctor more often, (face it, most of us are tied to the doctor for at least a yearly ob/gyn appointment when we are younger for our birth control…?) BUT is not a great deal of this in preventative health as far as regular pap smears and mammograms? Imagine the soaring costs if no preventative health care screenings were done.
As John pointed out only a few blog posts ago, most preventive medicine does not pay for itself — including mammograms and pap smears. So these procedures do not lower costs, they add to costs, even though they may be valuable from a health point of view.
The large point is: shouldn’t people pay a price equal to the expected cost they will impose on the insurance pool when they enter that pool? The answer is surely: yes.
What if we applied the New York Times standard to New York City restaurants. Require all restaurants to charge the same price, no matter what the customer orders and no matter what the quality — whether it’s a greasy spoon or Alain Ducasse. Can you imagine how awful the food would be. You would have to go to New Jersey to get a decent meal.
Sounds like a mighty thin market to me.
Vicki, you also need to know something about the economics of insurance. To do the “exercise” you need to know that since women live longer than men, their life insurance must cost less. Unisex rates would cause premiums to rise for women and fall for men. I assume the same is true for disability insurance.
I see with my aging parents (in their 80s) that the cost of my father’s healthcare is far higher than my mother’s. Mom went to doctors all her life for preventive and situational care, whereas Dad did not. Mom did not take any meds on a regular basis via prescription. Now Dad has multiple chronic conditions, takes 12 pills a day,and has been hospitalized several times. Mom — 2 pills per day and one trip to the hospital in the past 5 years. So women shouldn’t pay more just because we have reproductive organs or will live longer — I had my repro organs removed and my individual healthcare premiums keep going up every 6 months even though I’m extremely healthy!
I happen to come from a “unisex” state whereby health premiums and all other products including auto insurance, are the same for males and females. It is an ongoing battle that ends rapidly each legislative year, to change back to “having sex” in Montana and not be the only “unisex” state in the US.
The arguments here in Montana are simply political and “equality among the sexes” and has nothing to do with cost of premiums or who is more sick.
You raise an interesting question, John, that does require some discussion.
Years ago I served on the Board of TIAA-CREF, the giant insurance company for educators. We did unisex anuities at the time, to give women the same annual payout received by men, even though women live about 5 years longer than men (I call this the “male health crisis”).
Now, shame on me, I do not recall whether we also unisexed our life insurance products. But, you are right, if we unisex one of these life-contingent financial contracts, we probably ought to unisex all of them. That does set up an incentive for cherry picking, but so what? We’re used to that.
I would much sooner unisex health-care policies than any other life-contingent financial contract. Women bear children and also do the bulk of work raising them. I liken that contribution like that of a soldier. Women should be rewarded for it. In fact, I would be happy to see women granted a pension just for bearing and raising children, although that opens up a pandora’s box of side effects (e.g., having children just for the money).
So here’s an issue on which one could have a lengthy blog.
Happy to see you are still a fan of musical theatre. Good post!
To me, the greater disparity regarding health insurance/coverage is that NEITHER a female or male EMPLOYEE pays the respective differential based on age and gender under an employer sponsored plan (either fully insured or self-funded and assuming something other than 100% employer paid) while an entrepreneur obtaining INDIVIDUAL coverage will find, generally, that the rates vary by age, and usually gender. The ‘inequities’, then, are far broader based than just woman premiums vs. man premiums.
Uwe:
Premiums based on social value rather than expected costs. What an interesting idea. Of course, good moms should be charged less than bad moms (maybe based on entering first grade math and reading scores). And women who are antisocial enough to have no children should probably pay the highest premium of all.
Nobel Prize winners should get huge discounts. But tenured professors who have nothing interesting to say and teach poppycock to their students (Is Cornel West at Princeton?) should pay through the nose.
If society wants to subsidize health care costs for any group, it should finance the program out of general funds and not force the costs directly onto insurers or their customers.
General fund financing is essentially what happens now with employer-provided group coverage, albeit indirectly and sloppily. The actual cost to employees is more-or-less capped at what a healthy individual would pay in the private market. How close it comes depends on such things as the employee’s tax bracket, and on whether he works for a small company that uses age-banding or a large company that (allegedly) uses pure community rating.
John:
Well, that’s what you do when you depart from purely actuarial pricing. It actually was passed into legislation some years ago.
The alternative would be to price actuarial correctly and then subsidize in other ways, if that is deemed desirable in our democracy.