Apparently my post from last week on Sen. Kay Hagan complaining about the cost difference of health insurance for men and women sparked the News and Observer to explore the issue in today’s paper.
Unfortunately, the headline writer doesn’t understand economics. The headline chosen by the N&O reads “NC lets insurers charge women more for coverage.” Wow, imagine that — government staying out of something and letting the free market set the rates — go figure. The correct headline should have read “NC lets free market set rates for men, women.”
Instead, it introduces this negative concept that women are for some reason being price gouged by health insurance companies for coverage.
First off, let’s just ask why do we think there is a gender inequity? Is it because insurance companies have all agreed to price gouge women? Are they all just run by chauvinist male CEOs who hate women and want them uninsured? Or is there an actual cost basis for women being charged more? You know, crazy concepts like they use insurance more often than men and are actually more expensive to cover than a man. Nah, that can’t be the real reason, that would kill the inflammatory rhetoric like the headline of the N&O.
But let’s explore this concept a little more and think about the ramifications of what would happen if Hagan’s proposal to equalize rates is made law.
Let’s just say for example that a 25 year old man would pay $150/month for his insurance and a 25 yr old woman would pay $250 for hers. What do you think the insurance companies would do under Hagan’s plan? Do you think they would cut the price of the woman’s insurance down to $150/month? No — they would raise the rates on the man’s to $250/month — in essence, charging above market rates for insurance and making it more costly for men to buy insurance.
Or let’s say that rates for both equalized to somewhere around $210/month. Either way, men would be paying more for their health insurance just because of this mandate. The cost of a woman’s health insurance would then be partially subsidized by all men — so much for the era of the independent woman.
But what consequence does that have? Well, men under 30 (also known as “young indestructibles”) are already the least likely to purchase health insurance. Artificially inflating their rates under some false idea of “gender equity” will only further push them out of the market — a market that needs these young men in the pool since they rarely use the insurance coverage they have — making it more affordable for insurance companies to offer coverage for older, less healthy individuals.
So with prices higher for young men to buy insurance, less do so, making the pool for insurance smaller, causing all premiums to go up. In essence, Hagan’s plan will actually end up raising rates for everyone and cause more people to be uninsured. But again, why let that stop a mythical ideal of “fairness”?
But is this really any surprise? This is what mandates do — they drive up rates for everyone. Why should we expect anything different this time? If anything, I’m starting to believe more and more that there is an organized covert effort to add as many mandates as possible to drive up the costs so high that the system implodes and forces a public option.