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Long-term care insurance and gender

By Jay MacDonald ·
Tuesday, March 19, 2013
Posted: 6 am ET

Women in the United States live, on average, five years longer than men, according to the latest National Center for Health Statistics report. Now, the nation's largest long-term care insurance provider plans to make women pay for their extra longevity.

Kaiser Health News recently reported that Genworth Financial plans to price some of its long-term care policies by gender beginning this spring. Genworth says the rates will apply only to new customers who purchase individual policies (about 10 percent of its policyholders) and won't affect women with existing policies or who apply with their husbands.

New Genworth policy seekers should expect to pay 20 percent to 40 percent more for want of a Y chromosome, according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance, an industry trade group. Experts expect other long-term care insurers to quickly follow suit.

If the term "gender rating" rings a bell, it should: Health insurance companies will be barred from the practice under health care reform, beginning in 2014.

Long-term care insurers, however, are not bound by President Barack Obama's health care overhaul law.

Genworth says its records show that women collect 2 out of every 3 long-term care claims dollars, and hence should pay for the additional risk their longevity poses to the company.

But insurance advocates such as Bonnie Burns, a policy specialist at California Health Advocates, say women also save insurers millions by providing months or years of free in-home care to ailing husbands who would otherwise be on the insurer's nickel. In their view, all a rate hike of this magnitude will accomplish is to place individual female policyholders at greater financial risk in the future.

Until recently, gender pricing was the norm in health insurance. A 2012 study by the National Women's Law Center found that 92 percent of health insurers priced by gender in all but the 14 states that have outlawed the practice. But beginning next year, insurers who sell health coverage through the new state-based health exchanges will be able to vary premiums only on the basis of age, family size, geography and tobacco use.

Burns says long-term care insurance should be held to the same gender-neutral standard.

"Gender pricing is good for insurance companies, but it's bad public policy and it's bad for women," she says.

What do think? Should women pay more for long-term care insurance because they live longer?

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Jay MacDonald is a contributing editor and co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters.

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1 Comment
March 19, 2013 at 6:46 pm

I am a Life Insurance Broker from Canada. I can't understand how people are not worried about there long term care need with all the statistics out there. I have had one person inquire about it in the last 8 years. I think we are all in for a real storm given that in Canada by 2020 our seniors population will be at 20 per cent.