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Aged? Female? Need Long-Term Care? Look For Rate Increases

One of the most fair of all health reform regulations is the choice to make men and women pay the same rate for coverage. Currently, the majority of states ask women to pay considerably more for private health plans on the individual market. In less than one year, however, all small group and individual plans will require that both genders be charged the same rate. There are a few areas where this doesn’t not apply, though, such as long-term care.

The Affordable Care Act does not prevent long-term care insurers from underwriting freely based on gender. Therefore, the American Association for Long-Term Care Insurance has announced their plan to increase rates for female applicants next year. This places women who really need care at a disadvantage, yet there are ways around such rate increases.

According to Jesse Slome, executive director of the company, premiums for women may go up by 20 to 40 percent under their new plan. These new rates will only affect those who have yet to enroll in individual coverage with this carrier, and are applying alone. Women who have previously purchased a health plan through this insurer will not be charged additionally, and those applying with their spouse will also see no difference in cost.

As women receive two out of every three claims dollars, as Genworth Financial reported, this pricing will work in the insurer’s favor. In terms of ethics, it is naturally an inconsiderate move.

“Gender pricing is good for insurance companies, but it’s bad public policy and it’s bad for women,” said Bonnie Burns, of California Health Advocates, a Medicare advocacy and education organization.

American Association for Long-Term Care Insurance states that last year, their median annual premium was $1,720 for a 55-year-old purchasing between $165,000 and $200,000 of insurance and was eligible for medical discounts. With the frontrunner of long-term care coverage making such changes, other carriers will likely create similar policies.

Long-term care is designed for people who require assistance with everyday routines that they are unable to perform. The Centers for Medicare and Medicaid Services (CMS) claim that an approximate 60 percent of elderly persons in the United States will eventually need long-term care. Of course, these services are not only reserved for the aged: about 40 percent of Americans currently using long-term care are between age 18 and 64.

Recently, many state Medicaid programs have added an LTC waiver program to offer such services to low-income individuals, but if you do not qualify for Medicaid, you must purchase an LTC plan privately. Long-term care coverage helps pay for a caregiver in the home or at a facility, usually a flat rate for to cover a specific time frame. For example, a plan could cover $150 per day for 3 years (the standard plan from AALTCI).

As this type of coverage has a reputation for being unaffordable, it has not been a favorite among buyers. Consequently, the industry has been dwindling over the years, with companies either increasing rates or going out of business.

While reasoning for women’s premium increases may be different from a standard medical plan with long term care, it makes sense from an insurance perspective. For regular medical insurance, women require a higher number of health services to stay healthy, and in long-term care, the issue is that women live longer than men.

Securing an in-home provider of care for aging women is vital, especially at the time they begin to need such assistance. Many women still act as the caregiver when their spouses need long-term care, but when there is no one around to help them, hired help is necessary, and therefore, insurance may also be to keep the costs down.

Like health insurance, turning a profit from providing a person with daily essentials, like eating and dressing, is fairly obnoxious, but long-term care insurance still exists. Now single women in their old age, the ones who are most likely to need the service the most, are the target of higher premiums.

“The Affordable Care Act recognized the gender bias in health insurance,” LuMarie Polivka-West, of the Florida Health Care Association, a trade group for nursing and assisted living facilities, said. “The same [laws] should apply to long-term care insurance.”

Employers are already bound by gender discrimination laws to offer equal priced group health insurance to male and female workers. As the major sources of private coverage are each responsible for providing fair health plan premiums due to federal laws, this leaves a hole in long-term care coverage.

If you live in Colorado or Montana, the long-term care rate increases do not apply. Both states have adopted laws preventing gender bias in all forms of health insurance. In other states, if more advocacy groups acknowledge this gap in the health care law, changes can be made nationwide.



B. Somers

B. Somers is a contributor to Health Insurance News, focusing on medical coverage, carriers, public programs and Obamacare. Writing for East Coast Health Insurance since 2012, she got started with healthcare and insurance news at its most exciting time in U.S. history.