S.F. to fight bias in health insurance costs SAN FRANCISCO

San Francisco City Attorney, Dennis Herrera holds a press conference in his office at city hall after the California Supreme Court agreed to look at legal challenges to Proposition 8, which currently bans same-sex marriage, on Nov 19, 2008 in San Francisco, Calif. less San Francisco City Attorney, Dennis Herrera holds a press conference in his office at city hall after the California Supreme Court agreed to look at legal challenges to Proposition 8, which currently bans ... more Photo: Mike Kepka, The Chronicle Photo: Mike Kepka, The Chronicle Image 1 of / 1 Caption Close S.F. to fight bias in health insurance costs 1 / 1 Back to Gallery

The city of San Francisco is challenging state legislation that allows insurance companies to charge women more than men for health coverage.

In a practice known as gender rating, women in California pay up to 39 percent more than men for coverage in the individual insurance market, which is where people who aren't covered by employer plans or state health programs get their insurance. Nationwide, about 7 percent of women buy their health coverage directly from insurance companies.

Gender rating is illegal in 10 states and restricted in two more, but in California, state legislation allows insurance companies to set different rates, on the basis that women are more expensive to care for than men, even without including maternity care. At least until age 55, women tend to visit their doctors for annual screenings and checkups more often than men and are more likely to suffer from certain chronic diseases.

But critics call the system unfair.

"This is something that acts in a discriminatory way over women who are seeking health insurance," said San Francisco City Attorney Dennis Herrera. "It's something we should not be promoting as a society."

Herrera has sent a letter to the state attorney general giving notice that San Francisco intends to sue the state if legislation allowing gender rating is not repealed. The city is targeting two state statues, one that was passed in 1991 and the other in 2005. The gender rating policy only came to the city's attention a few months ago when a national study on insurance rates was released.

The city attorney is getting involved, Herrera said, because not only is gender rating unfair and discriminatory, it also puts the burden of health care on county governments when women can't afford high insurance rates.

"There's a direct fiscal impact to the city when women who are being discriminated against are unable to get health insurance," Herrera said. "They're forced into getting their health care from San Francisco General Hospital and city clinics."

Insurance companies have argued that their premiums reflect the actual costs of health care. Because women file more insurance claims than men, it makes sense that they should pay more for their coverage, said Robert Zirkelbach, spokesman for the trade group America's Health Insurance Plans.

He noted that as people get older, the gender rating process reverses, with men paying more for their insurance than women.

"Health insurance premiums reflect the underlying cost of health care, and at younger ages women tend to use more health care services than men," Zirkelbach said. "It's an effort to try to keep health care coverage as affordable as possible for as many people as possible."

But women's health advocates point out that the federal Equal Employment Opportunity Commission forbids employers from charging women higher premiums than men on the basis of gender alone. If it's considered sex discrimination on the job, the same rule should apply to people seeking individual insurance, they say.

In a report released in September, the National Women's Law Center found that California women under age 55 pay up to 39 percent more for insurance than men. The study looked at insurance coverage for women at ages 25, 40 and 55; the premium rates did not include maternity care.

Nationwide, the study found that younger women paid up to 48 percent more than men. At age 55, the differences were especially remarkable - depending on the insurance company, women paid anywhere from 22 percent less than men to 37 percent more.

That the discrepancies were so varied is proof that insurance companies aren't basing their prices on actual costs, said Judy Waxman, vice president of health and reproductive rights for the National Women's Law Center.

"Some insurers say they look at what women on average might spend and what men on average might spend, and then they come up with some premium cost," Waxman said. "But it's very hard to get behind their numbers because it's so gigantically different that it's crazy."