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Are health insurers penalizing women?

High-deductible plans cost women more than men, studies suggest, and the expense causes some to skimp on medical care they need.

By MarketWatch

Women long have proved more risk-averse than men in surveys that measure investing attitudes and behavior. Could they also show a preference for traditional health plans over newfangled ones that expose them to higher risk of out-of-pocket costs?

There is little research on the notion so far, though several studies point to potentially higher costs for women, especially where maternity care is concerned. A 2007 analysis from the Kaiser Family Foundation found high-deductible plans often translated into large out-of-pocket costs for a variety of pregnancy scenarios.

Last year, researchers from Harvard Medical School reported that high-deductible plans penalize women financially. Health costs for working-age women were about $1,000 higher than for men, or $1,844 compared with $847 on average, the study found. Adults ages 18 to 44 showed a particularly wide gap, with women's median outlays nearly three times higher, $1,266 versus $463.

High-deductible plans make a single insured person responsible for at least the first $1,100 of out-of-pocket medical costs upfront. High-deductible family plans start at $2,200, though deductibles often run much higher. Some high-deductible plans are paired with savings vehicles, such as health savings accounts, or HSAs. Under Internal Revenue Service rules for HSA-eligible plans, annual 2008 out-of-pocket expenses excluding premiums can't exceed $5,600 for self-only coverage or $11,200 for family coverage.

Women under 50 often seek more medical care than men because of pregnancies, said Diana Zuckerman, the president of the National Research Center for Women & Families, a nonprofit think tank in Washington, D.C. Other health risks increase after the childbearing years end, she said.

The trend toward higher deductibles is "worrisome," especially for women, Zuckerman said. They are often primary caregivers for children, earn less money than men and may be in precarious financial situations if they're single or divorced.

"A lot of times the people who can least afford the risk are the ones getting these policies hoping they stay well, and when they don't, obviously it's better than nothing, but it can be a huge financial burden on people who just don't have any excess money to spend," Zuckerman said. "For a lot of people, it's not a lot better than nothing because a $5,000 deductible means they can't live in their house anymore."

Finding acceptable trade-offs

Rebecca Clyde of Phoenix, a self-employed mother of two in her early 30s, shopped around and was put off by traditional health maintenance organizations' premiums, which were $1,100 to $1,400 a month for her family of four. "They were ridiculously expensive," Clyde said.

Because she isn't planning to get pregnant again, she said, she found a high-deductible family plan from Blue Cross/Blue Shield of Arizona and Lumenos that charged a $540 monthly premium -- in exchange for accepting a $2,400 annual deductible and $4,200 out-of-pocket maximum.

"I would rather just pay for what I actually use and have more control over the cost than front-load all the expense myself," Clyde said.

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She figures her family will come out ahead by several thousand dollars even if they have a bad year and have to spend up to their out-of-pocket maximum.

Clyde said she's become a better consumer by asking for prices and slowing the urge to seek care. "In the past I would see something, say a little rash, and immediately take my daughter to the doctor. Now, I'll hold off or call the nurse line and ask should I come in or just watch it for a few days. This puts a lot of responsibility back on us to live a healthy lifestyle because that way we'll go to the doctor less."

Continued: Not always ideal

Pam Noonan-Saraceni, 54, isn't as enthusiastic about the changes she's made since signing up last year for an individual policy with a $10,000 deductible and $400 monthly premium. That deductible is misleading, she said, because if she were to reach $10,000, her Assurant Health plan would require her to cover 50% of the next $7,500 in medical expenses. Plus, she's on the hook for the first three days of inpatient hospital care, amounting to $750 a day in her Cody, Wyo., area, and her plan has declined to pay for her cholesterol-lowering prescription drug.

As a former breast-cancer patient who paid out of pocket for two $3,000 MRI tests under a $5,000-deductible policy when she was living in Connecticut in 2006, Noonan-Saraceni said she's already a wiser consumer.

"I'm not a person that goes to the doctor every time I get a cold," she said. "If I had good health coverage and I got a cut on my finger that I thought looked infected, I'd go to the doctor. Being that I have to pay $100 to go to the doctor, I stop and think before I go. I don't think that's a good thing."

For Noonan-Saraceni, Medicare is still 10 years off. "I have to have some coverage, and the high deductible is what we can deal with now. But I should have better coverage, and I know that."

Staying in control

JoAnn Laing, the president of Information Strategies in Ridgefield, N.J., and author of "The Consumer's Guide to Health Savings Accounts," said women generally are embracing consumer-driven health plans.

"It's both an economic and an emotional decision," Laing said. "We're finding it's more heavily economic, based on premiums and what savings they can accumulate for the future."Many women don't seek health services regularly or become more judicious when they do, she said, and they like the idea of rolling over leftover money at the end of the year. "They like the control factor," Laing said.

Income differences likely play a large role in determining how threatening or appealing the plans are to women, said Judy Waxman, the vice president for health at the National Women's Law Center in Washington. Women who are high earners or who have other resources aren't fazed by a $5,000 deductible and may see an HSA as another tax shelter, but those who work low-paying jobs and have children to support may be crushed by a $500 or $1,000 deductible, she said.

Overall, women aren't well served by high-deductible plans because they have to use medical services more often than men and are more likely to skimp on needed care if they have to pay out of pocket, she said. If the individual needs more health care and has less money, insurance coverage with a huge hole upfront is not good," Waxman said. "If your employer is paying for the entire HSA and it's going to cover everything in the deductible so then you can go smoothly into your health-care coverage, that's one thing, but that's not the way it's likely to work."

Few takers

So far, few workers have yet warmed up to account-based health plans such as HSAs, according to a survey of 1,000 employees conducted last year by Towers Perrin, a human-resources consulting firm in Stamford, Conn.

Consumers don't find the plans easy to use, aren't saving for long-term needs and aren't comfortable with the financial risk associated with high deductibles, said Dave Guilmette, the managing director of health and welfare for Towers Perrin.

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Health care costs © Comstock/Jupiterimages
How much health insurance do you need?
Sandy Praeger, president of the National Associate of Insurance Commissioners, breaks it all down so you know exactly what you need at any age.
"Satisfaction levels were quite lower than with traditional plans," Guilmette said. "One of the startling findings is they're saying they're feeling like they have less access to affordable, quality health care and are thinking the quality of care they receive in these plans is less than what they'd receive in traditional plans."

This article was reported and written by Kristen Gerencher for MarketWatch.

Updated Sept. 10, 2008

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