| City Attorney Challenges Constitutionality of Insurance 'Gender Rating'
By Jonathan Farrell Mar 20, 2009
San Francisco City Attorney Dennis Herrera filed suit on Jan. 27 to strike down provisions of California State law that permit gender rating, a practice by health insurers and health care service plans that can force women to pay a significant premium or price differential based solely on their gender.
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The Insurance Industry practice of charging women up to 39 percent or more for health care coverage Herrera calls it discriminatory and unconstitutional.
The 13-page pleading filed in San Francisco Superior Court this past January alleges that such rating practices by health insurers deny women their right to equal protection under the California constitution, and asks the court to declare the discriminatory laws void and enjoin state officials from enforcing them.
The filing of the lawsuit makes good on a notice of intent Herrera sent to California Attorney General Edmund G. Brown Jr. Herrera also sent the notice to Insurance Commissioner, Steve Poizner and Department of Managed Health Care Director Lucinda Ehnes. The notice of intent distributed this past December was to inform all of them of the City's plans to file the constitutional challenge.
Herrera praised the efforts of CA State Sen. Mark Leno (D-San Francisco) who introduced legislation on Jan. 14 to prohibit gender rating by health insurance companies in California, which could, depending on the outcome, obviate Herrera's legal challenge.
“Women who are priced out of private health coverage by insurance companies' discriminatory practices are often forced to rely on public hospitals and clinics instead," said Herrera.
"So, gender rating isn't simply unfair to women — it's unfair to all taxpayers who are forced to subsidize health insurers' discriminatory pricing schemes,” added Herrera.
Back in October The New York Times reported that advocacy groups such as the National Women’s Law Center have raised concerns about these gender rating practices noticing the wide variations in premiums that could not be justified by actuarial principles. A report by the National Women's Law Center issued last September found that California women under the age of 55 pay up to 39 percent more for insurance than men. The study looked at insurance coverage for women at ages 25, 40 and 55.
The NWLC has encouraged members of the US Congress to inquire further and to question insurer’s excuse that women are more likely to have chronic illnesses and use health services more than men.
Yet, as homemaker as well as breadwinner women are increasingly at risk for more health problems. According to the American Heart Association heart attacks are among the leading causes of death for women. Women are also less likely to receive appropriate and timely treatment for heart attack.
As more women take on the role of primary breadwinner for a household, no doubt health issues will continue to increase. “Today 61 percent of women in the workforce are mothers with children under age three,” notes economist Tamara Draut. In her 2005 book entitled, “Strapped:” Why America’s 20 & 30-somethings can’t get ahead,” she details the pitfalls facing society, especially women.
“But having two incomes to raise a family doesn’t provide the security blanket,” she said. As an economic director and researcher with Demos a non-partisan public policy advocacy organization founded in New York City in 2000 Draut points out, that “two income families with children are twice as likely to declare bankruptcy.”
Add childcare costs which can be as much as $10,000 per year to the list of expenses and health care is even more difficult to attain. Draut’s concern is that this leaves women and children in mediocre care and society’s future at large more vulnerable.
Local social worker and activist James Chionsini with Planning for Elders would agree. He referred to the insurance industry as “sexist.” Chionsini sees such practices by insurance companies as “a justification for denying a person health coverage.”
Nora Johnson, an insurance billing expert with Medical Billing Advocates of America agrees, as she said, “It is an outrage.” While she was not able to speak in particular about gender rating practices, Johnson sees many instances of negligence on the part of the insurance companies toward people in need of healthcare.
Johnson also noted that insurance companies will charge more for individual coverage plans and offer much less than group coverage offered by an employee. Johnson’s point of view sees many insurance companies “making ungodly profits” at the patient and employers’ expense.
Some advocates and analysts worry that as so many companies reduce or withdraw benefit coverage, more people will seek individual coverage. This translates into large profits for insurance companies offering individual plans.
The Mission Dispatch contacted David Lipschutz an attorney on staff at California Health Advocates of Los Angeles to provide more detail on gender rating. But he said that “since most of the work we do pertain to Federal Medicare laws rather than state insurance law, we do not have much experience with this issue.”
Yet one explanation for why the practice of gender rating happens is because there are no federal guidelines governing specific amounts health insurance companies can charge in the individual insurance coverage market.
Leno talked to the Mission Dispatch and said that the practice of gender rating is a moneymaking strategy that is “only about two years old.” Leno also mentioned that while the insurance industry argues that their practice is justified based upon statistical data, “The National Women’s Law Center clearly found the data to be inconclusive because statistics vary widely across the nation.”
Leno also told the Mission Dispatch that this arbitrary practice must stop. Because, “it is an issue of discrimination.” And, he noted that 10 other states have already outlawed this type of practice by insurance companies.
“I am grateful to Sen. Leno for his leadership in pursuing a legislative fix that can hopefully remove the need for the City's lawsuit,” said Herrera. “But it is clear we need to act now to end a practice that imposes an unfair and unconstitutional burden on too many women in California,” Herrera said.
"During these difficult economic times, when more women are losing their jobs, and employers are likely to cut their health care plans, we must protect fair access to health care in the individual market," said Sen. Leno.
The Senator's bill, SB 54, to end gender rating in California will be reviewed by the Health Committee by the end of March.
Before proposed legislation (known as a bill) is brought before the California State Senate two or more committees review it. “This allows for proponents and opponents to present all sides,” said Leno. Then the committees vote to decide whether or not a bill is ready to be formally presented for a hearing.
“We hope to get this through and to the governor’s desk by August,” said Leno.
Both Herrera's litigation and Leno's legislation apply only to individual health care service plans and policies; employer-sponsored plans are already prohibited from charging men different premiums than women in California.
For more information about gender rating and the outcome of the lawsuit filed visit the City Attorney’s web site at: http://www.sfgov.org/site/cityattorney_index.asp
Or contact: communications rep. Matt Dorsey at (415) 554-4662.
Got News or Comments? Contact Jonathan Farrell at email@example.com.
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