It’s not every day that major companies publicly announce plans to start discriminating against their female customers. But that’s exactly what has happened in the long-term-care insurance industry. In the last year, four insurance companies, John Hancock, Genworth Financial, Mutual of Omaha, and Transamerica, all announced that they would begin “gender rating,” or charging women higher prices than men for long-term-care insurance.
There’s another name for this practice: sex discrimination, and it’s illegal.
Long-term care is expensive, but many will end up needing it at some point in their lives to help with daily activities as a result of disability or chronic illness, either at home or in a care facility. The costs of managing such conditions can be crushing- tens of thousands of dollars a year -and typically aren’t covered by Medicare or health insurance. Long-term-care insurance can provide important peace of mind that a decline in health won’t lead to financial ruin. With long-term-care policies already expensive, these companies’ decisions to boost the cost of policies from 20 percent to 40 percent for single women will put this insurance entirely out of reach for many.
This increased cost is compounded by the fact that women already are paid only 77 cents for every dollar paid to their male counterparts and so have less money to spend in the first place. Indeed, a report released last week by the American Association for Long Term Care Insurance found that a 55-year-old single woman would pay an average of $1,225 per year for the same level of benefits available to a 55-year-old single man for $925. (Married couples typically purchase a couples’ policy and would not be affected by the new rates.) After these announcements, the National Women’s Law Center filed complaints with the U.S. Department of Health and Human Services (HHS) against Genworth, John Hancock, Mutual of Omaha and Transamerica challenging their sex discriminatory pricing.
The Affordable Care Act (ACA) prohibits sex discrimination in a broad range of health programs and activities, including those that receive federal assistance-which these four companies do. In fact, they actually receive a boost from federal and state governments through long-term care “partnership programs” around the country, which are joint efforts between Medicaid programs and insurance companies to encourage individuals to purchase policies from these insurers. Now it is up to HHS to take action to ensure that women are not over-charged in the long-term-care market simply for being women.
There is ample precedent for the basic principle that gender rating in insurance constitutes discrimination on the basis of sex. Federal courts have long held that basing insurance premiums on sex in employer-provided insurance is illegal discrimination. More recently, the ACA explicitly prohibited charging women more for health insurance based on their sex. Meanwhile, there is another opportunity to act now to ensure that women in California don’t face discrimination in long-term care, with its own protection and without relying on HHS.
State Assemblywoman Mariko Yamada, D-Davis, recently introduced a bill that would expressly prohibit high long term care insurance premiums for women If passed, California would join Colorado and Montana in banning sex discrimination in long-term-care insurance. Long-term care is an expensive proposition already. Women shouldn’t have to pay an additional “gender tax” when they plan for their future.