by Brigette Courtot, Policy Analyst,
National Women's Law Center
A home health care agency. A day care center. A nonprofit community-based organization. A dentist’s office.
What do all these businesses have in common? They’re likely to employ more women than men — and to pay more for health insurance because of it. A new report released this week as part of NWLC’s “A Woman is Not a Pre-Existing Condition” campaign sheds light on gender rating — i.e. the insurance industry practice of using gender to determine health insurance premiums — as it occurs in the group health insurance market, where many businesses buy coverage for their employees.
In 2008, NWLC examined gender rating in the individual health insurance market, that unwelcoming place — and often last resort — where people try to purchase coverage directly from insurance companies. We found that gender rating most often results in women paying more than men for the same health insurance, simply because they are women.
But many aren’t aware that gender rating also happens in the group health insurance market. Insurance companies consider different factors when deciding how much to charge a group for its health plan, including the gender make-up of the workforce. A business is charged more for coverage if it employs women and businesses with a predominately female workforce — such as the ones listed above — could pay significantly more. Protections against group market gender rating exist in some states, but typically only for small businesses (generally 50 employees or fewer) — check out our new report for details.
Gender rating affects the overall premium that a business pays; premiums for men and women within the same health plan aren’t different in this case, since employment discrimination laws prohibit employers from charging individual male and female employees different rates for coverage. Nonetheless, gender rating can present a serious obstacle to affordable health coverage — if the overall premium is not affordable, a business may drop its offer of coverage altogether or shift more health insurance costs to employees.
Basing health insurance premiums on gender is wrong, whether it happens in the individual or the group health insurance market, and every woman should be protected against this discriminatory practice, no matter where or how she gets her health insurance. NWLC supports health reform that addresses this issue once and for all, and eliminates gender rating across health insurance markets, for individuals and for groups of all sizes.