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In the mindset of many in Washington (both Democrats and "moderate" Republicans), everything is predicated on the notion of fairness. When it comes to health insurance, cost-benefit analysis and risk management are the last things on the minds of leaders such as Senator John Kerry (D-MA).
Women tend to pay higher premiums than men for health insurance. Insurers have argued this is because women tend to have higher health costs, particularly during the child-bearing years.
However as the feds scrutinize health care, that disparity has come under the spotlight; earlier this week, Massachusetts Dem John Kerry introduced a bill that would prohibit insurers from charging women more than men.
And testifying in the Senate yesterday, Karen Ignani, the president of the big trade group for health insurers, said she doesn’t think gender should factor into women’s rates when buying individual policies, the WSJ’s Washwire reports.
According to the New York Times, Kerry told Ignani that the “disparity between women and men in the individual insurance market is just plain wrong, and it has to change.” Ignani agreed the disparities “should be eliminated.”
The fact is, some individuals consume more health care, based on gender, age, family history, etc. There are countless variables taken into account when a health insurance provider enters into a contract with an individual. The simple way for insurance companies to comply with Senator Kerry's wishes?; just raise the rates of everyone. Would that make those pushing the mantra of fairness happy? How about their constituents?
Everytime government puts their hands on items such as this, there are unintended consequences. That's because there is a lack of ability to examine the reality of such situations. For nearly ten years now, as a male, I have paid more for auto insurance than do most females my age with comparable driving records (a clean record for my part, minus one speeding ticket). Yet, as a 25 year-old male driving a sportbike, I understand the insurance company views me as more of a liability than say a 45 year-old female poking around town in her '98 Ford Escort. Does Senator Kerry believe my rate should be equal with hers?
Health insurance companies are viewed with contempt by many, despite the life-saving services they help to and are in business to provide. It is the responsibility of a company to cover overhead and turn a profit; for without profit there are no workers. In order for this to occur, responsible bets must be hedged by health insurance companies. Can you imagine the screams from Washington if a company simply said, "sorry, but we're all out of money and you're no longer covered for that hospital visit"? Then again, they'd probably just call Bernanke and have him crank up the presses.
Nonetheless, private business operates in the world of reality. Washington operates in a world where the notion of fairness trumps everything, including reality itself. If Senator Kerry and others get their wishes, the only way to produce such fairness will be to raise health insurance premium rates on all individuals.
Kyle Godfrey is a graduate student from Savannah, GA and runs the blog Yellow Limes.
Posted May 7th, 2009 by Armen Hareyan
