Massachusetts is currently considering a bill that would prohibit disability insurers from charging higher rates to women than to men. Even if a woman is the same age, has the same job, and has the same health history as a man, she pays on average 25% more for the same protection, according to Massachusetts State Representative Ruth Balser.
This bill would prohibit discrimination in premium costs or benefits based on sex in individual disability, accident, or sickness insurance policies. It would also bar disability insurers from making any distinction in insurance policies based on conditions unique to one’s sex, such as pregnancy.
The disability insurance companies, on the other hand, say that the difference is necessary, due to the fact that women account for 70-80% of long-term claims nationwide. While they do purchase more policies than men (60% as compared to 40%), insurers argue that this isn’t enough to make up the difference in revenue. Insurers are in the business of making money, and paying out more in benefits than the amount of premiums coming in isn’t good for business.
According to the Affordable Care Act, health insurers can’t charge a woman more solely because she is a woman. Yet, Montana is the only state with a law requiring disability insurance to be gender neutral, and Massachusetts has a bill in the works. It remains to be seen whether Massachusetts will pass this bill, and other states will follow suit. With some of the major disability insurance carriers (such as Unum and Guardian/Berkshire) keeping corporate offices in Massachusetts, we doubt the bill will be passed without a fight.
What’s your opinion? Should women pay more in disability premiums than men with the same characteristics? Are the disability insurance companies’ arguments in favor of the disparity justified?