My one and only trip to Washington DC was about twenty years ago. This is odd for someone as politically active as me. I was attending a B’nai B’rith national policy conference. What a trip! I had the opportunity to tour the White House and Senate, visit the Lincoln Memorial and Washington Monument, and talked, one on one, with several Senators. But the most inspiring person I met, the guy who made the biggest impression, was one of the featured speakers, the young Ohio Secretary of State, Sherrod Brown.
I have been a Sherrod Brown fan for twenty years. And now I am truly disappointed.
OK, Sherrod Brown and I do not see eye to eye on the health care debate. That’s not news. What is shocking, at least to me, has been the way he has argued his case. I expected more from Sherrod Brown than the factless, emotional presentations of late. This Sherrod Brown plays well to most of Rachel Maddow’s audience. He appears on her show and Keith Olbermann’s Countdown to feed the base. No Problem. Sunday, December 20, 2009, he was on Face The Nation, the venerable CBS show. It was a cringe-worthy presentation.
Bob Schieffer, the moderator of Face The Nation, tries to give his guests enough time to talk in complete sentences. Used to speaking snippets and catch phrases on television, many politicians falter when given the extra time. Senator Brown must have misplaced his index cards. He kept on talking about the evil insurance companies charging women more than men. He also briefly mentioned that age is also a pricing factor, but quickly retreated back to gender.
I touched on this very subject in my October 19th post. In the past I would have wished that Mr. Brown had seen my blog. Now I’m not so sure that it would matter. Will Sherrod Brown let the facts get in the way of a good argument?
I had a client contact me today. She was worried that her health insurance policy was all screwed up. After watching TV, she couldn’t understand why her premium was substantially less than her husband’s even though he is four years her junior. Her policy is fine, it is our politicians that are screwed up. So I ask for your patience while we discuss a real issue with real numbers.
Case Study #1
Bob and Jane are healthy 21 year olds living in Cuyahoga County. They are both single, non-smokers, and have clean driving records. They need to purchase liability auto insurance from their neighborhood Erie Insurance agent. I wasted a half hour of Brian Ritzenberg’s time. They also need a basic health policy from Anthem Blue Cross with a $1000 deductible, office visit copays and an Rx card. And while they are at it, they are each going to purchase a twenty year term policy for $250,000 from North American. Auto, Health, and Life Insurance. Nothing out of the ordinary.
Auto – $731 per year
Health – $123.45 per month
Life – $217.50 per year
Auto – $630 per year
Health – $157.54 per month
Life – $205 per year
The price of insurance reflects the risk. Young men have more accidents. They pay more for auto insurance. Young women have more medical claims. They pay more for health insurance. Some young women may need to purchase their own health insurance. Almost all young women, at least here in Northeast Ohio, drive.
Case Study #2
Joseph and Pamela are healthy 61 year olds living in Cuyahoga County. Everything, including the amount of time I wasted of Brian’s, is the same as above except for their ages.
Auto – $358 per year
Health – $539.64 per month
Life – $1960 per year
Auto – $358 per year
Health – $515.66 per month
Life – $1550 per year
Life insurance is less expensive for adult women, young and old. Auto insurance is the same price or less for women at every age. Health insurance is sometimes less, sometimes more. With all of the online rating services, anyone can recreate this little test from the comfort of their home or office. In other words, you know that Senator Brown’s argument is specious at best.
We have almost a year invested in this process. That means that I have been sitting here for twelve months waiting for the Sherrod Brown I met in Washington twenty years ago to show up. The current Sherrod Brown is no longer inspiring. Imagine my disappointment.
Well you've got me thinking as usual. Do you think the Senator might be of the opinion that it is time to even the playing field for purchasers of health insurance? What about people with pre-existing conditions or poor genetic profiles? They are bigger risks, but they didn't do anything in many cases to have been dealt this hand. Women also didn't get to choose their gender. So what if everybody pays the same and with the combined premiums the program has sufficient funds to cover everyone?
As I think about car insurance also, perhaps it is a little unfair to penalize a particular man because his cohort has a higher risk profile. Charge everybody the same, except if they have an accident that they caused, then raise the premiums. I'd argue that a person has greater control over improving their driving habits than their health issues.
Of course, I don't have your background in health insurance and my exploration into a flat premium has no mathematical model to support it.
I'm being rhetorical more than anything.
Paying the same means that someone pays MORE than necessary to cover someone else's risk. That is fine if we, as a nation, accept that responsibility. Sadly, Mr. Brown wanted to lower the female rate to the male rate when convenient. He is not interested in the real numbers, just the one's that SOUND good. The government can always print more money. A business must balance its books.
By the way, you would be amazed by how many people blame their medical conditions on their parents. They may have been dealt a bad hand, but they were the ones who chose to play it.
The whole purpose of insurance is to pool statistical risks. We can change which factors are relevant. What you can't change is how much is paid out and how much you have to collect to stay in business.