Charging women less will ultimately hurt them more

What’s at stake for women with the ruling on ObamaCare? That’s the question that Kaiser Health News Correspondent Julie Appleby asks in her latest post.

A key issue she explores is the provision in the law barring insurance companies from charging women more for health insurance than men, starting in 2014.  She quoted my response:

Opponents of the law, including Grace-Marie Turner of the conservative Galen Institute, say the law’s restrictions on charging women more than men distort the insurance market in ways that can affect everyone. Raising costs for some men could result in fewer people overall purchasing coverage, driving up costs for everyone, including women, she says.

Other provisions, including providing contraceptives without a copayment, will also drive up costs, she says, and the rule also affects women business owners.

“Telling Catholic women business owners that they have to cover contraception and sterilization doesn’t give them more choice, it gives them fewer choices and it takes away their religious freedom,” Turner says.

The law’s requirement that health insurance companies level out premiums between men and women is one of its many price distortions.  The law also requires young people to pay more so older people can pay less.

Forcing men and younger people to pay higher prices for coverage gives them a greater incentive to simply drop out of the market.  This will drive up costs for those who remain, creating the same death spiral we have seen in states that have tried similar tactics with their health insurance markets.

The solution, as I outline in my latest article for Forbes is to give everyone more choices in a truly competitive market, with lower prices encouraging more participation which ultimately lowers prices for everyone.