Women and the Individual Health Insurance Market: It's No Shopper's Paradise

by Lisa Codispoti, Senior Advisor
and Brigette Courtot, Policy Analyst
National Women’s Law Center

This post is part of a weekly series on Women and Health Reform.

The overwhelming majority of people get their health insurance from an employer or through a public program like Medicare or Medicaid. So it’s not surprising that most people have absolutely no idea how tough it is to buy insurance directly from an insurance company in the individual insurance market. And for women –- it is a particularly tough place.   

At the National Women’s Law Center, we just released a report identifying the many obstacles women face in getting affordable comprehensive health coverage in the individual insurance market. The barriers include being rejected for coverage for reasons that are relevant to women, being charged more than men for the exact same coverage, and experiencing great difficulty in finding affordable health coverage that includes comprehensive maternity care.

There are many federal laws that protect women who get their health insurance through their employer.  Those federal protections simply don’t apply when you try to buy coverage in the individual insurance market.

Insurers can reject applicants for a variety of reasons -– many very relevant to women.  For example, a woman can be rejected simply because she had a Caesarean section (in 2005, 30% of all births were by C-section). In nine states and the District of Columbia, it is still legal to be rejected for coverage because you are a survivor of domestic violence.

Women are often charged higher premiums than men -– for the exact same health coverage. NWLC found that in 40 states and the District of Columbia, it is legal for insurers to charge women and men different insurance premiums for the same health coverage, under a common industry practice called gender rating.  Our findings raise real questions about how arbitrary gender-rating is in practice. In the worst case, for instance, we found an insurance plan in Missouri that charged 40-year-old women 140 percent more than same-aged men for identical health insurance policies. Yep, you read that correctly –- 140 percent more, solely because of gender! To be fair, we did find that beginning at age 55, some insurers actually charge men more than women. But at least half of the plans we reviewed still charged women more than men even after age 55; once again, the variations we found raise questions about how arbitrary this practice really is.

On the availability of maternity coverage (or lack thereof), of the more than 3500 individual market health plans we studied, the overwhelming majority did not include any maternity coverage.  We found supplemental maternity policies- called “riders” -- in Kansas and New Hampshire for more than $1100 a month (no- not a typo); that cost, of course, is on top of the premium for the underlying health plan. We also found maternity riders offered in 25 states that capped coverage at a paltry $2000 during the first 2 years of coverage –- over $5,000 less than the average cost of a best-case-scenario uncomplicated delivery. 

So, why should you care about the individual market in the first place?  After all, it is the least likely way for a woman to get insurance. Why the big deal?

Well, some health reform proposals could push more people into looking for coverage in the individual insurance market. Other proposals for a flat tax credit for health insurance raise real questions about equity. For example, if everyone gets the same tax credit of $2,000 -– is it fair or equal for the women who have to pay more for their health insurance, simply because of their gender? Or for those who have to pay more because they are older? Or sicker?  What about those who are denied coverage because they had a Caesarean section? Or are a survivor of domestic violence? Where can they turn?   

While some states have taken steps to protect consumers in the individual market, far too many have not. A patchwork of protections has resulted, so that a woman’s ability to purchase individual market health insurance depends largely on the state in which she lives. Simply put, too many women have nowhere to turn for health coverage, and are at the mercy of insurers in a market fraught with obstacles. This is unacceptable. Expanding the role of the individual insurance market is no solution for the health care crisis. We’ve said it before: the next Congress and Administration need to make real health reform  their top priority, and this health reform must guarantee that all people — women and men alike — have access to comprehensive, affordable, quality health care.

Comments

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[Roger Carrier]

I had a friend. Maggy (no real names used) was a librarian, and she introduced me to dozens of wonderful books. She and her husband, Richard, had a son who was extremely allergic to flour.

Bill was a good-looking man of twenty-four, and one day he went to a company picnic and ate a hamburger. It contained "Hamburger Helper" or some such thing with wheat flour in it.

The reaction was so severe that Bill died, leaving a wife and two children. Maggie and Richard were devoted to their two granddaughters. Years later, Richard died, but Maggie continued working at the library. Then after a couple years, she developed breast cancer.

Although it was a bad case, Maggie could have lived another year, but she had other plans. She wanted to leave her house to her granddaughters for their education, but the treatment was so expensive that she would have had to sell her home to pay for it.

Rather than do that, Maggie took a pistol and shot herself in the head. She died a hero in my book. She died to save her home.

I would appreciate anybody's comment on this story--and I have others (a well-off plumber who lost his house after the insurance company refused to pay more than $100,000. He now lives in a small apartment, starting all over at age forty-five, and he is still at risk of losing everything).

If you oppose National Health Insurance, then please respond with an alternative. Remember that in England and elsewhere, there are private clinics, private hospitals, and private insurance.

We have some of the highest rates for the survival of cancer in the world (45% is covered by the government through Medicare because cancer tends to strike old people more often than younger people). How many opponents to universal coverage are turning down their Medicare coverage?

Just some thoughts because I am worried about losing my home. What if an adult child got sick, and he or she didn't have health insurance? Then I would have to sell my home to save them. What else could I do? Or would any parent do?

Health insurance for my wife and I costs over $1100 a month! Or in other words, $13,200 a year and climbing with no end in sight.

My life savings has gone down $30,000 to pay for insurance. This is an attack on the middle class. Don't sit around and wait for the insurance criminals to come after your house. Speak up!

Senator McCain wants to give me $5000. Then I'll give it to the criminals who run the insurance industry. Sounds like the insurance industry is going to get $5000. Nevertheless, it won't do me any good. I can't buy insurance for any price.

Basic morality 101: No one should lose their home or life savings just because they get sick. Our wealthy country can do better than that. You can make all the arguments you want, but the fact is that the American middle class is NOT going to put up with our private system forever.

* * *

My reply to the opposition:

You know we already have universal coverage--for people 65 and older, for veterans, congress, the president, people with major disabilities, certain other people under 65, most small children through CHIP programs. The total cost for national health insurance would actually be less than the total cost of our present system.

How can a veteran oppose universal coverage? The VA hospitals in America rank higher than even the Mayo clinic and John Hopkins. VA hospitals are run by the government.

Here is a problem that few people even think about. Our friends have an adult daughter with a 16/yr old son. Neither she nor her son have any insurance. If either of them gets a major disease, then our friends will have to mortgage or sell their house to pay for it. They are not the kind of people who are just going to let their daughter or grandson die.

Something is terribly wrong when the only reason a person is working is to pay for health insurance. I mentioned that our insurance is over $1100 a month--and climbing (my wife's went up $50). Get cheaper insurance? We tried that in a dozen companies, and we were turned down.

One man wrote back and told me to do what the rest of us do and cancel that expensive insurance. That's an answer? Put my home at risk? He said I should pursue a healthy lifestyle.

FACT: Half of the transplants are NOT related to unhealthy life styles.

FACT: Many (I don't know the percentage) people die from diseases that have absolutely nothing to do with lifestyle (my sister--a jogger--had a perfect lifestyle and died of Huntington's Disease. Her healthy heart only prolonged her suffering). I know a man who got a virus that destroyed his eyesight.

Another person's alternative to universal coverage was that suffering makes people stronger. Huh? That may be true in a philosophical sense, but if that person was suffering needlessly, then you can be sure that she would be singing a different tune.

And what does needless suffering in a wealthy country teach? That we have lost our vision of the American dream. Work hard, build your wealth, contribute to society, then lose your home because you got sick? In what civilized society does this happen besides the good old USA.

In the countries that have universal coverage, the mortality rates are lower than ours. In those countries, you can also purchase private insurance. Long waits? Sometimes, but that assumes we don't have long waits in the USA. All emergencies are handled as fast as they are here.

FACT: There is no movement a foot to discard universal health care in any of these countries. Go to what we have? Now that's a joke.

I talked to a British couple, and they like their system. He had to have a hip replacement. It was not an emergency, and he had to wait a month or something, and he got it at a private hospital paid for through the national health program.

There are so many lies told about European systems that it's enough to make the statues leap from their pedestals. People who oppose it always point to Britain. Do you ever notice that they don't point to Ireland, Germany, the Scandinavia countries, or to Australia or New Zealand?

Billions have been spent by our medical industry to keep things the way they are. That's something to think about. Billions to influence the public against universal coverage.

Do the radio windbags who oppose universal coverage have insurance? Yes, it's easy to do when you are covered--or think you are (not reporting previous minor problems will be used to deny coverage if you get cancer--that happened in Utah recently).

A woman had a $100,000 back operation and was back charged because her husband failed to disclose that he had a back injury from years ago!

Is that right? Is that the American way?

Another financial point to consider is this. Our high infant morality rate costs the tax payers money. There is also a hidden tax. Those children who survive our inadequate system will cost the taxpayers billions over their lifetime. A lifetime of special care because we have an inadequate system.

Our present system is an attack on the middle class, and I want the war against the American dream stopped.

* * *
The following is part of an article about the VA hospitals by Douglas Waller for Time CNN.

Most private hospitals can only dream of the futuristic medicine Dr. Divya Shroff practices today. Outside an elderly patient's room, the attending physician gathers her residents around a wireless laptop propped on a mobile cart. Shroff accesses the patient's entire medical history--a stack of paper in most private hospitals. And instead of trekking to the radiology lab to view the latest X-ray, she brings it up on her computer screen. While Shroff is visiting the patient, a resident types in a request for pain medication, then punches the SEND button.

Seconds later, the printer in the hospital pharmacy spits out the order. The druggist stuffs a plastic bag of pills into what looks like a tiny space capsule, then shoots it up to the ward in a vacuum tube. By the time Shroff wheels away her computer, a nurse walks up with the drugs.

Life in a big-name institution like the Mayo Clinic? Not hardly. Shroff, 31, a specialist in internal medicine, works at the Veterans Affairs hospital in Washington, where the vets who come for the cutting-edge treatment are mostly poor.

If you're surprised, that's understandable. Until the early 1990s, care at VA hospitals was so substandard that Congress considered shutting down the entire system and giving ex-G.I.s vouchers for treatment at private facilities.

Today it's a very different story. The VA runs the largest integrated health-care system in the country, with more than 1,400 hospitals, clinics and nursing homes employing 14,800 doctors and 61,000 nurses. And by a number of measures, this government-managed health-care program--socialized medicine on a small scale--is beating the marketplace.

For the sixth year in a row, VA hospitals last year scored higher than private facilities on the University of Michigan's American Customer Satisfaction Index, based on patient surveys on the quality of care received.

The VA scored 83 out of 100; private institutions, 71. Males 65 years and older receiving VA care had about a 40% lower risk of death than those enrolled in Medicare Advantage, whose care is provided through private health plans or HMOs, according to a study published in the April edition of Medical Care. Harvard University just gave the VA its Innovations in American Government Award for the agency's work in computerizing patient records.

And all that was achieved at a relatively low cost. In the past 10 years, the number of veterans receiving treatment from the VA has more than doubled, from 2.5 million to 5.3 million, but the agency has cared for them with 10,000 fewer employees.

The VA's cost per patient has remained steady during the past 10 years. The cost of private care has jumped about 40% in that same period.

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Notes on elective surgery:

Waits for elective surgery may be a good thing because with the passage of time that surgery may not be recommended. In my case, the doctor wanted to operate on a hernia in two weeks. Coincidentally, I saw another doctor a few days later and told him about my upcoming operation. I've never seen a doctor so angry! He told me that I didn't need an operation--that was thirty years ago. My uncle got in right away to have a prostate operation and a diverticulitis operation. Both unnecessary. He died of cancer a year later.

In our system, doctors are paid on the basis of how many operations they give, not on the basis of how many people they keep well. What we have is moral bankruptcy, and also financial bankruptcy if you get sick.

Check out this reply to my article:

"Your rant makes me more and more happy that I am a Canadian! We have universal health care here although waiting lists are long for elective surgery. I think it's criminal that you don't have it in the US."