October 26 2009
Carrie L. Lukas
This story from the Denver Post highlights the story of Suzanne Pariser, a lawyer. She's upset that no one else wants to pay for the cost of her having another baby:
Suzanne Pariser, a Denver lawyer and mother of 2-year-old Willa, is putting off expanding her family because she cannot find an affordable insurance plan that includes maternity coverage.
"That's the main reason we're not having a baby right now," she said. "We definitely want to have another child."
Pariser is annoyed that insurance company executives, in essence, are determining her family planning.
"My anger is mostly that insurance companies view having a baby as a medical complication that costs them money," she said. "They view it as a disease."
The only plan she could find that offered maternity coverage was more expensive in the long run than paying out of pocket to have a baby, Pariser figured.
Costs vary by hospital or birthing center, but the average bill for a vaginal birth with no complications is about $7,500 and for a cesarean section, $13,200.
The insurance companies are determining her family planning only in so far as they don't want to pay for the cost of her hospital stay and prenatal care, which will be $10,000 plus. How rude of them not to want to pay! But, then again, she doesn't want to pay either. This lawyer, who presumably has some earning power, wants affordable health insurance and doesn't want the companies to recoup the cost of her having another baby. She complains that insurance companies see having baby as a medical complication that costs them money, but of course that's how they see it.
What Ms. Priser wants is for insurance companies to take a loss on her family and hike the premiums of twenty-something men (who are paying high car-insurance premiums because of their gender) to pay for her care. And before anyone starts sending e-mails about insurance companies' obscene profits, take a look at this from the Associated Press which details how the insurance industry is less profitable than many other industries, posting a profit margin of just 2.2 percent last year.
The idea of sex-based pricing makes many people uncomfortable. We all sympathize with women having babies and with the fact that younger women require more health care than men. But we need to be clear as a policy matter that this isn't baseless discrimination: It's a rational attempt to deal with business reality, and we accept the principle in many other instances, such as with car and life insurance. Eliminating that practice will require cost-shifting. Someone else is going to pay for women's extra care and nobody is going to want to do so. That's why provisions like this have to be coupled with individual mandates, to force twenty-something men to buy policies that don't make sense for them. Now how, exactly, is that fair?