President Obama’s health care reform law takes big strides to eliminate the gender disparity in health costs, particularly by prohibiting most insurance companies from “gender rating” — the practice of charging women more for their coverage simply based on their gender. But that provision doesn’t apply to long-term care insurance, an area in which women may soon be charged higher premiums than their male counterparts for the exact same type of coverage.
Even though Obamacare will put an end to gender discrimination in the vast majority of insurance plans, the long-term care insurance industry isn’t required to cease the practice. And the industry is beginning to take advantage of that. Kaiser Health News reports that the nation’s largest long-term care provider has announced it will begin setting its prices by gender as early as this spring, a move that move may encourage the rest of the long-term insurance industry — which has already been hiking up its premiums over the past several years — to do the same:
Women’s premiums may increase by 20 to 40 percent under the new pricing policy, said Jesse Slome, executive director of the American Association for Long-Term Care Insurance. The average annual premium for a 55-year-old who qualified for preferred health discounts and bought between $165,000 and $200,000 of coverage was $1,720 last year, according to the association.
Experts say they expect other long-term-care insurers will soon follow suit.
Long-term-care insurance provides protection for people who need help with basic daily tasks such as bathing and dressing. It typically pays a set amount for a certain number of years — say, $150 daily for three years — for care provided in a nursing home, assisted living facility or at home. Never a very popular product with consumers, many of whom found it unaffordable, in recent years the industry has struggled and many carriers have raised premiums by double digits or left the market.
Women typically live longer than men — and often end up becoming the primary caregivers for their husbands, which reduces those men’s need for long-term insurance care. But when women’s health eventually devolves, they often don’t have a partner who can provide that type of care for them, and they’re stuck relying on insurance coverage. That’s why women typically have much higher claims for long-term care services, and why insurance companies want to be able to charge them more.
But women also tend to have fewer economic resources than men do, since an enduring wage gap accumulates over time to leave older women with significantly less wealth. Over the course of a 40-year working career, the average woman loses out on an estimated $431,000, and the annual wage gap jumps to about $14,352 in the five years before retirement. Requiring women to pay more for health care in the final years of their life could be a significant drain on their resources, particularly for single women, and ultimately prove unaffordable.
And ultimately, charging women more won’t address the fact that the country’s long-term care industry is currently an unsustainable model. The health care reform law originally included a provision to help address the long-term care crisis in the United States — but the Obama Administration decided the Department of Health and Human Services didn’t have enough authority to implement it, and the GOP has simply pushed to repeal it rather than working to craft a better policy. The fiscal cliff deal finally did away with it for good, but lawmakers still haven’t worked out a better system for taking care of Americans’ long-term care needs — in an equitable way that’s affordable for both women and men.