Document 83: "Insurance," in Susanna Downie, Decade of Achievement: 1977-1987: A Report on a Survey Based on the National Plan of Action for Women (Washington, D.C.: National Women's Conference, 1988), pp. 46-47.
p. 46
INSURANCE
NATIONAL PLAN GOALS
• Every State should adopt the Model Regulation to Eliminate Unfair Sex Discrimination, amended to cover pregnancy and related expenses, newborns, unwed mothers and children born out of wedlock • Eliminate use of sex-based actuarial mortality tables in rate and benefit computation.
In every state except Montana, women still pay higher rates than similarly situated men for health, annuity, disability, and auto insurance (over age 25). A study by the Nongender Insurance Project of Montana found that women who were able to carry all five major individual insurance policies (auto, health, disability income, whole life, and annuities) paid a lifetime excess of $20,176 over what a similarly situated man would pay for the same coverage. All this discrimination based on gender would become illegal under a Federal ERA, and State ERAs have been successfully used to challenge discrimination.
LIFE INSURANCE: The industry claims women are getting a price break in this area, but there is no price break for cheaper forms of life insurance (which is all most women can afford) and even at higher levels, women's slightly lower premiums buy a lower net value product. In one company's policy (in Massachusetts), $3520 saved in lower premiums bought a policy worth $7966 less. Individual women should not be shortchanged just because women as a group live a few years longer than men as a group. Fair rates for Life insurance should be based on lifestyle and actual risk factors (e.g. smoking vs. nonsmoking, general fitness).
HEALTH: Women are routinely charged almost twice as much as men (except under Blue Cross, in some states), and their policies still exclude coverage for pregnancy or reproductive-related health needs. The industry argues that women visit the doctor more, but when challenged to prove this in court (in Pennsylvania, 1985), they were unable to; a 1983 study found that only 13.8 per 100 women spent time in the hospital each year, compared to 19.3 per 100 men. The industry also argues that pregnancy is a "voluntary" condition, and therefore should not be covered. But equivalent health insurance polices for men cover hair transplants, vasectomies, sports-related injuries and other conditions that are at least as "voluntary" as pregnancy.
AUTO: Although women under 25 still pay a lower premium in most states, this "advantage" accrues mostly to their fathers; most women who own cars and pay their own auto insurance are over 25. Auto insurance should be based on number of miles driven, a much more accurate predictor of accident rates. Men drive approximately twice as many miles as women.
DISABILITY: Rates for women are sometimes twice those for men, and do not cover maternity-related disability. But women do not suffer disability insurance at a higher rate than men. Group disability insurance when offered is rarely available to part-time workers. 70% of whom are women.
PENSION & ANNUITY: On the assumption that they will live longer, women's monthly annuity payments are smaller than men's, even when they have paid the same amount (or more) into the system. Yet after age 65.86% of women die in the same proportion as 86% of men.
The inequities in insurance companie's rate-setting schemes has been increasingly well-documented in the course of the decade since 1977. In spite of millions of dollars spent on public relations and lobbying by insurance companies to preserve the status quo, there have been a few victories and many signs of progress, all achieved after years of intensive lobbying and litigation by concerned feminists:
•• The major breakthrough of the decade was the passage of the Non-Gender Insurance Law in Montana in 1983; the law went into effect Oct. 1, 1985 (for full details, please see next page).
•• In 1983, the Supreme Court (in Arizona Governing Committee v. Norris) prohibited sex discrimination in employer-operated pension plans covered under Title VII. But companies with less than 15 employees were exempted. Most employer-sponsored insurance, in all 50 states, is now unisex.
•• In 1984, in TIAA v. Spirt, a Second Circuit Court decision (with Supreme Court approval) ordered equality of benefits for all pensioners retiring after 1980. TIAA is the fourth largest retirement system in the U.S., and this was a precedent-setting case, which showed that preexisting contracts can be equalized without the company going bankrupt. The insurance lobby consistently argues that fair insurance rates for women would "cost too much".
•• In 1986, COBRA (the Consolidated Reconciliation Act) went into effect, allowing a woman divorced or widowed to continue coverage under her husband's group plan, for three years, and only by paying both the employer and the employee portions of the monthly premium. This is not ideal, but it is better than total sudden loss of all coverage.
•• Five states now prohibit discrimination in auto insurance: Michigan, Hawaii, Massachusetts, North Carolina, and Montana.
•• Massachusetts recently issued regulations banning sex-discrimination for all types of insurance sold in the state after Sept. 1, 1988, and including parts of some pre-existing contracts. Insurance companies have filed suit to challenge the law.
•• Gender neutral insurance is being offered by an
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•• Co-op America, a national network of co-ops, businesses and individuals with a progressive, grassroots, constitutency, offers its members ($15/yr.) an Insurance Plan with unisex rates that covers choice of alternative health care modalities, reproductive health care (including homebirths), and has group rates; it is espeacilly set up for people who do not have employer-sponsored health coverage. The Co-op American Plan offers the additional benefit of a socially responsible investment policy for investing premiums (through the plan's administrator. Consumers United). Co-op America is "dedicated to creating an alternative marketplace for socially responsible businesses and socially concerned individuals". The 75-page catalog is free to members.
•• The time is right for litigation. NOW has brought a class action suit against Mutual of Omaha, in the District of Columbia, over Mutual's discriminatory rates in health insurance. New York State NOW is suing Metropolitan Life Insurance Co. over discriminatory rates for life insurance and disability coverage. O'Grady v. New York State Retirement System charges unfair retirement practices for women, who are required to take a leave of absence for pregnancy. All three of these suits are pending.
MONTANA: THE BREAKTHROUGH STATE
The Women's Lobbyist Fund of Montana was founded in 1982 to promote public policy beneficial to women and families. One of the first issues they took on was sex-based insurance rates, and in 1983, the Montana legislature passed the Non-Gender Insurance Law, to take effect October 1, 1985. The effort was greatly helped by the fact that Montana's Insurance Commissioner is elected, and is a woman. Ms. Andrea Bennett, who strongly supported the non-gender insurance legislation.
WLF established a "Non-gender Insurance Project" to monitor compliance, counter the industry's disinformation campaign, build women's lobbying skills and community support for the law, and be a resource to women's groups in other states working on changing sex-based insurance practices. Marcia Youngman, Director of the Project, says the battle to prevent repeal of the new law has been much harder than getting it passed in the first place. The latest repeal attempt, in 1987, passed the legislature but was vetoed by the Governor.
The evidence so far is that none of the industry's horror stories are coming true, and that in fact women and families have benefitted. 58 insurance companies have entered the state since 1985, and only 9 left, most of whom said it was not because of the new law, except for one company, who said they were leaving because of the new law, but then they came back the following year.
Rate Changes in Montana have been beneficial:
In Health and Disability Income insurance, 84% of women experienced decreased rates. The biggest change was for single women under 30, whose rates dropped by 24% or nearly $200 less per year. For auto insurance, 90% of Montana's drivers experienced no rate increase. Young women (under 25) found their rates increasing, but some also reported finding lower rates by shopping around. Term Life Insurance rates for 35-year old women rose slightly, by about $9 a year (on a $50,000 policy). For Whole Life Insurance, women gained an average of $7,457 in dividends and cash value, after subtracting for the 8% increase in their premiums. Annuities also showed big gains for women — an average $5,880 more in monthly payments over a 10-year period. For this study, conducted by WLF, insurance rates in Wyoming were used for comparison to control for rate changes not ascribable to the new law.
In spite of these positive changes, which the industry could use in its favor, the insurance industry has been reprimanded by the Insurance Commissioner for misrepresentation and "hanky-panky". Nevertheless, the Commissioner, Ms. Bennett, says: "I do believe that non-gender insurance is going to happen all over the United States."
WLF reports that groups in at least 14 states are pursuing non-gender laws, and the Non-Gender Insurance Project is organizing a conference in Washington DC in May 1988 to bring together women from all 50 states, and (mostly women) state legislators, to coordinate strategies to end discrimination. The Conference is being cosponsored with Women's Equity Action League, The National Center for Policy Alternatives, ACLU, and others.
-- most of the information
above was taken from the WEAL Packet (see description, below) and materials supplied
by the Montana Non-gender Insurance Project.
RESOURCES:
Women's Equity Action League, 1250 I St. NW, suite 305, Washington DC 2005. (202) 898-1588. Has packet on Insurance Discrimination that includes articles on the issues, a list of resources both in the states and nationally, a glossary, and very concrete, well-thought-out suggestions for state action, all for just $5.
Women's Lobbyist Fund, Non-Gender Insurance Project, 1214 W. Koch, Bozeman, Montana 59715. (406) 587-5704. Contact: Marcia Youngman
National Organization for Women, NOW Insurance and Pension Project, 1401 New York Ave. NW #800, Washington DC 20005-2101. (202) 347-2279. Has publications, fact sheets (state-by-state), sample press packet, etc. NOW has a health insurance plan for members, administered through Consumers United.
Business and Professional Women's Clubs, 2012 Massachusetts Ave. NW, Washington DC 20036. (202) 293-1100.
Co-op America, 2100 M St NW, Suite 310, Washington DC. 20036. (202) 872-5307. Alisa Gravitz (General Manager).
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