Herrera Challenges Constitutionality of Insurance ‘Gender Rating’ in California

Insurance Industry Practice of Charging Women Up to 39% More for Health Care Coverage Called Discriminatory, Unconstitutional

SAN FRANCISCO (Jan. 27, 2009) — City Attorney Dennis Herrera today filed suit to strike down provisions of state law that permit gender rating, a practice by health insurers and health care service plans that can force women to pay a significant premium or price differential based solely on their gender. The 13-page pleading filed in San Francisco Superior Court this morning alleges that such rating practices by health insurers deny women their right to equal protection under the California Constitution, and asks the court to declare the discriminatory laws void and enjoin state officials from enforcing them.

Today’s lawsuit makes good on a Dec. 18 notice of intent Herrera sent to California Attorney General Edmund G. Brown Jr., Insurance Commissioner Steve Poizner and Department of Managed Health Care Director Lucinda Ehnes informing them of the City’s plans to file the constitutional challenge. On Jan. 14, State Sen. Mark Leno (D-San Francisco) introduced legislation to prohibit gender rating by health insurance companies in California, which could, depending on the outcome, obviate Herrera’s legal challenge.

“Women who are priced out of private health coverage by insurance companies’ discriminatory practices are often forced to rely on public hospitals and clinics instead,” said Herrera. “So, gender rating isn’t simply unfair to women — it’s unfair to all taxpayers who are forced to subsidize health insurers’ discriminatory pricing schemes. I am grateful to Sen. Leno for his leadership in pursuing a legislative fix that can hopefully remove the need for the City’s lawsuit. But it is clear we need to act now to end a practice that imposes an unfair and unconstitutional burden on too many women in California.”

“During these difficult economic times, when more women are losing their jobs, and employers are likely to cut their health care plans, we must protect fair access to health care in the individual market,” said Sen. Leno. The Senator’s bill, SB 54, to end gender rating in California, could be heard in the State Senate as early as February.

Both Herrera’s litigation and Leno’s legislation apply only to individual health care service plans and policies; employer-sponsored plans are already prohibited from charging men different premiums than women in California. A report by the National Women’s Law Center issued last September found that California women under the age of 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.