A bill proposed in California legislature this week would eliminate gender based pricing from long term care insurance policies and prohibit companies from enacting similar pricing models in the future.
Gender Based Pricing
Assemblywoman Mariko Yamada (D- Davis) introduced AB 1553 on Tuesday, citing the current insurance pricing system as unfair discrimination.
“Gender discrimination has broad public policy implications,” Yamada said in a statement. “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.”
Long term care insurance provides coverage for benefits received while living at home, in an assisted living facility, nursing home, or other long term care setting. Many people end up needing long term care when they age because they are more frail and unable to complete certain daily tasks on their own.
Unfair Policy? 
Women have longer life expectancies than man, living, on average, to 82 years old, while men live an average of 77 years. Because they live longer, they are more likely to be divorced or widowed and need someone to care for them.
Women make up 2 of every 3 nursing home residents in the state of California and around 70% of all long term care claims in the country. This glaring disparity is the reason long term care insurance companies began introducing gender based pricing, as a way to adjust for true risk of policyholders.
Despite what Yamada says, this is not the first instance of pricing based on life expectancy. For the same reason, women typically pay less for life insurance than men, but that fact is not often mentioned when discussing this issue.
Similarly, women pay less for car insurance than men because they also pose a lower risk while driving, according to years of statistics. Adjusting pricing based on risk is the basis of how insurance works, and it only makes sense to do so.
Recent Complaint
Yamada is not the only person to oppose the new pricing model, though. A women’s advocacy group filed a complaint with the Office for Civil Rights at the Department of Human Health and Services earlier this month, claiming the gender based pricing for long term care insurance is “sex discrimination”. The National Women’s Law Center is now awaiting a response.
AB 1553 is co-authored by Sen. Hannah-Beth Jackson, Assemblywomen Cheryl Brown and Susan Talamantes Eggma. The bill will likely be referred to the Assembly Insurance Committee in February.
Read more about the recent complaint with the Office for Civil Rights or find out more about how gender-based pricing works.
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