Update on May 20, 2014…this bill died in committee and is no longer moving forward. It is an important issue to be aware of so we are keeping this article up.
Without legal intervention, women could end up paying 40% more for long-term care insurance coverage than men. And this could happen as early as January 2015. To stop such gender-based pricing products from being sold in California, Assembly member Mariko Yamada has introduced AB 1553.
Gender discrimination on health insurance premiums is illegal under the Affordable Care Act, but long-term care insurance in California is not classified as health insurance, but rather as disability insurance, so this prohibition does not apply.
While California is currently 1 of 6 states that does not yet offer such gender-based priced products, this could quickly change if the California Department of Insurance approves the sale of several new long-term care insurance products that are currently under review. Colorado and Montana have already passed legislation to prohibit the sale of such policies.
“Gender discrimination has broad public policy implications,” Yamada said. “Women earn less than men in their lifetime and accumulate less wealth, so charging women more for the same policies is neither a fair nor effective solution to covering the industry’s costs. Pricing based on life expectancy sets an extremely dangerous precedent.”
Because women generally live longer than men, they depend on long-term care benefits more and often reduce men’s dependence on these services by serving as their caregivers. According to the American Association of Long-term Care Insurance, almost 70% of women 75 or older are widowed, divorced, or never married. This makes them less likely to have spouses to provide care for them and more likely to reside in assisted living and nursing facilities. Indeed, in California 2 out of 3 nursing home residents are women.
Many advocates agree that gender-based pricing would make it nearly impossible, especially for women with lower fixed incomes, to afford long-term care insurance. This means many women would have to do without care, and the risk of elderly women falling into isolation and poverty would most likely increase.
“Women have always had a hard time figuring out how to pay for long-term care insurance from their lower incomes and resources,” said Bonnie Burns, our Training and Policy Specialist. “Gender discrimination will force even more women out of the market, shifting the cost of their care to their families and the state’s Medicaid program.”
This blog is edited from the article, California bill seeks to stop insurers from implementing gender-based pricing.