Women & Insurance

April 25, 2007

As long as I’m conducting Women’s Studies 101, I’ll give you this tidbit that I saw on the news the other night. A web-search turned up the following, via MSNBC:

“High-deductible plans punish women for having breasts and uteruses and having babies,” said Dr. Steffie Woolhandler, the study’s lead author…Women’s costs are higher because women need mammograms, cervical cancer vaccine, Pap tests, birth control and pregnancy-related services that men do not.

Nobody is being punished: Women’s costs are higher because they are biologically predisposed to certain conditions. Is this fair? I don’t know - life isn’t fair, in general. But it certainly would not be any more fair to force men to subsidize women’s mammograms, or for abstinent women to subsidize birth control pills for others. The issues at hand are simply not insurable risks, and to categorize them as such, under some mistaken notion of fairness, is ridiculous; most of them are not actually insurable in any sense, except where people not subject to the risk are forced to bear a disproportional burden.

For example, the potential need for birth control medication is definitively not insurable, because the insured party has a sufficient amount of - if not total - control over whether she needs it. Nobody accidentally needs “the pill.” And one of the fundamental principles of insurance is that we know, or assume to know with great certainty, the probability of risk to which a group of individuals may be subject, but with regards to any particular individual, we know nothing. But there is almost no randomness in “getting pregnant.” It is nearly always a planned outcome, where the only thing left to chance is whether or when conception will occur, after the decision has been made to try and conceive. The only reason any fiscally responsible insurer would cover birth control for women, is to reduce exposure to the peril of pregnancy, that is, to reduce or eliminate unplanned pregnancies, the expenses of which the law requires that they cover. If the law did not require such coverage, it would not be provided - or - to the extent that it would be provided, the cost would approximate the actual cost of risk retention, because anyone who didn’t want to pay for that amount of insurance simply wouldn’t carry that sort of insurance.

But certain elements are insurable. For instance, you could almost certainly take out a policy before planning pregnancy, which would cover you in the event of some catastrophic loss - for instance, the baby is born extremely prematurely, or with a dangerous condition, and requires expensive incubation and medical attendance. These things happen infrequently, and are expensive enough, that a great many people would likely purchase such policies. This is what insurance is designed to do - it is not designed to pay you for an outcome which you desire!

As far as certain other perils are concerned (e.g., breast cancer, &c.) it is not correct for people of markedly dissimilar risks to bear the burden of providing this sort of insurance coverage. Certainly, the risk of breast cancer in women is small enough that it can reasonably be pooled among women. The risk of breast cancer for men is markedly smaller, and just as it makes no sense to pool your risk of becoming disabled at work with the risk to which a professional football player is exposed, it makes no sense to pool men and women together with regards to these particular expenses.

And since the attendant examinations like mammograms (for cancer) or birth-control (for pregnancy) are so regular within the particular pool, no insurance can properly cover them, because we know that every woman of certain age will require one such examination annually, and so the price of that “coverage,” to the extent that it is covered, will be entirely built in to the premium. Adverse selection ensures that when conditions are such that an identifiable subset of a population will certainly suffer the loss, no pooling is effective, because those not subject to the risk will withdraw from the program, seeking to be insured among others with similar risks.

To those who might argue that certain features, preventative care, would be provided by insurers in order to reduce their exposure… Perhaps this is true. But it’s not necessarily so. What’s more likely is that the price of your premium would be reduced if you agreed to certain preventative measures - just like you may receive discounts on your auto policy for ABS, passive restraints, and theft-deterrent systems. The price mechanism ensures a demarcation between those willing to bear their own risks and those who are not, and also between those subject to the risks, and those immune from those risks.

Just as you can’t insure yourself against the “risk” of suicide, you cannot factually insure yourself against the “risk” of anything, the certain frequency of which you control. For brevity’s sake, I’ll stop here - but if you’ve got any questions, feel free to leave them in the comments section below.


Posted in: Women's Studies 101, ponderings

Comments

1 Comment so far

  1. trav.is April 25, 2007 9:51 pm

    Newsflash: Men and women are different. Therefore they (gasp!) require different things and (double gasp!) their subjective tastes are different. Ergo (fainting gasp!!!), their costs may not be similar.

    As you say, nobody is punished. If it is “unfair” that women must pay for medical treatment men don’t need, then it is “unfair” men cannot get pregnant.

    It costs more to have women’s clothing dry cleaned than men’s because it is more intricate and has a greater variance in material. It costs more to have women’s hair done than men’s because there’s typically more of it to style and women are typically pickier about it. Men’s auto insurance is higher because men drive more recklessly. On and on, ad nauseum.

    I could write a similar article for MSNBC lamenting how men are “punished” for having testicles and prostates by having to pay for medical tests that women do not.

    What is the big-government advocates’ goal? The elimination of all disimilarity and all risks?

    Get real.

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