The Obama Administration is about to spend $684 million on a public relations and enrollment campaign to persuade young, uninsured Americans to buy government-approved Obamacare plans. In order to be successful, it needs to persuade young men in particular to enroll, but Obamacare requires insurers to charge men the same for their premiums as women in 2014.
This attempt at fairness is anything but. If fairness were really the guiding principle, it would be quite simple: women would pay more for health insurance because women consume more health care.
First, let’s address the obvious. Women carry and deliver babies. Maternity care is expensive, and a rising number of women are taking on these costs without the help of a husband. (Nearly half of American first-child births occur outside of wedlock.)
But childbearing is not the only reason women’s health costs are higher. There are certain non-sex-related ailments that plague women with more frequency. When I sustained my second significant injury from running this year, I learned that stress fractures are more common among women. This also goes for strains and sprains. Women’s bodies tend to be smaller and more prone to wear and tear.
Yet women also tend to live longer. Life expectancy for American women is 81 years, compared with 76 for men. That’s great news for women who get to enjoy more life, but it’s also five more years of costly doctor’s visits and treatments. Men have a shorter lifespan, in part because they are three times more likely to die in accidents (13 times more likely to be killed while at work) and three times more likely to be murder victims. Unexpected and sudden deaths are tragic, but they are also cheap compared with deaths due to long-term health conditions. End-of-life care can be the most expensive kind of health care, and women survive to consume more of it.
Women’s greater attentiveness to their own health likely also contributes to their longevity. Pregnancy and childbearing aside, women seek preventive care and visit doctors more often. But these additional screenings cost money, and the person receiving the care should pay for it, not other members of her insurance pool (community-rated or not). After all, women may reap the benefits of this behavior by living longer lives; they should also take on the costs.
People are uncomfortable in acknowledging sex differences in health care costs, but they should recognize that those same differences crop up in other markets too. It’s not discussed as frequently, but sometimes men are the ones paying more for certain purchases, like car insurance. Would it be fair to charge women more for it just to give men a discount?
A better, more equitable solution would be for both men and women to pay for more noncatastrophic health expenditures outside an insurance plan. This is the only way to ensure that individuals — not pools of people — pay for what they consume. But given our current environment that encourages third-party payment, gender-based pricing is a tool that should be available to insurers. If our premiums don’t reflect our risk, our claims or our costs, then some people will be overcharged and others undercharged. The overcharged parties will underinsure, and the undercharged parties will overinsure, perpetuating the problems in our current system.