Elizabeth Edwards On The Inequitable Individual Market

Our guest blogger is Elizabeth Edwards, a Senior Fellow at the Center for American Progress Action Fund and wife of former Presidential candidate John Edwards.

eliz David Lazarus, in Sunday’s Los Angeles Times, brought us a fresh reminder of the challenges posed by preexisting conditions by raising a new one – being a woman.

Senator John McCain’s health plan is based on the idea that everyone should be on their own to buy their health insurance on the individual market. And it’s an approach fundamentally at odds with the point of health insurance: that we share risks. People with preexisting conditions, like McCain and myself, would pay much more for health insurance under his health plan, if we could get coverage at all.

Insurance companies have all sorts of characteristics they look at in order to increase premiums, such as preexisting conditions, occupation, age, and residence. But I hadn’t realized that the McCain plan would enable insurers to “rate-up” my insurance bill for not only my status as a breast cancer patient, but also my gender.

The ability to become pregnant has long been understood as an excuse to charge women more for health insurance (because, of course, men have nothing to do with that particular health condition). But what makes the Lazarus column interesting is that he tells us that insurers are charging women higher premiums even if pregnancy benefits are excluded. Blue Shield of California (Blue Shield) is now charging woman more in the individual market because:

“Our egghead actuaries crunched the numbers based on all the data we have about healthcare,” explained Tom Epstein, a Blue Shield spokesman. “This is what they found.”

That women get sicker than men?

“It’s all about the statistics,” Epstein said.

That doesn’t really inspire a sense of fairness. Doctors recommend that women have mammograms and other preventative screenings. Is Blue Shield really trying to discourage health screenings? Do they think that women are more accident prone? Whatever their reasoning, one thing is clear – they don’t want to enroll too many women:

We don’t want to get a disproportionate share of high-risk people,” added Epstein.

As Lazarus noted, “by ‘high risk people,’ what he means is ‘women.’”

Blue Shield, a not-for-profit company, says they are just following the trend of for-profit insurers in California (at least two competitors already adjust premiums based on gender). Blue Shield exists in a competitive market that rewards insurers for doing the wrong things. In that sense, it isn’t fair to pick on Blue Shield in particular, especially since Blue Shield’s CEO speaks constructively on health reform.

The point is that the insurers have given us just another example about how the individual market is fundamentally broken. Embracing it as the solution to our health crisis – as the McCain plan proposes to – will only make matters worse.