Women And Long-Term Care Insurance

In recent months, major insurers have adopted “gender distinct” rates for new coverage. Translation: If you’re a woman, you’ll now pay more than a man for the same coverage.

Rates for single women rose 20 to 40% last year, while rates for single men fell 15%, says Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI) in Westlake Village, Calif. For couples, who pay blended rates, premiums rose 3%.

Here’s an example: If you’re a 55-year-old woman in good health, you’ll pay an average of $1,225 a year for a new policy providing $164,000 in benefits, without any built-in inflation protection. A man of the same age and health with the same coverage would pay $300-a-year less, according to the AALTCI 2014 Long-Term Care Insurance Price Index.

The difference in premiums is even greater if you buy a policy whose benefits grow with inflation, which many experts recommend. A 55-year-old healthy man would pay $1,765 a year for that same policy with 3% inflation protection, but a woman might pay over $2,300 annually.

Why are women now paying more than men for long-term care policies? Longevity.

Women typically live five to seven years longer than men, which means they’d need benefits for more years. “So, it makes sense that they would pay more than a man,” says Slome. “Prices for insurance are based on risk, which is why men pay more than women for life insurance and bad drivers pay more than good drivers for car insurance,” he says.

A Fight to Overturn New Pricing

But women are pushing back.

Last month, The National Women’s Law Center (NWLC) filed complaints with the U.S. Health and Human Services Department’s Office for Civil Rights against leading long-term care insurer Genworth Financial and three others — John Hancock, Transamerica and Mutual of Omaha. The group maintains that gender-based premiums violate a provision of the Affordable Care Act that bans sex discrimination in health care.

“Women already have a hard enough time making ends meet, earning only 77 cents for every dollar earned by men,” says NWLC Vice-President and General Counsel Emily Martin. “With lower wages to begin with, women simply can’t afford to pay 20 to 40% more than men for the same long-term care insurance.”

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