Wednesday, October 28, 2009

More On Women And Health Insurance

That most health insurance in the United States is tied to employment is known to have several problems. For instance, this makes it harder for people to become entrepreneurs, even if they have great ideas, because entrepreneurs must get their insurance from that individual insurance market at a higher price. It is also harder to change jobs in general if the new firm you are considering doesn't offer the same benefits as your current employer.

But here's how this might affect women over and above the general effect:

First, if those individual insurance policies discriminate against women (see post below) then starting your own firm is even more expensive for women than it is for men.

Second, the fact that family health insurance is tied to full-time work might have odd repercussions. Think about a couple with a baby. They want to cut their hours of work to spend more time with the new arrival. But if each of them cuts the hours by the same amount they might be left without health coverage for the family! So the likely outcome is that only one of them will cut those hours and that the one doing it is the one with the lower earnings etc..

That is usually the woman, and the long-run consequences of that are something I have written about many times before (lower future earnings, more difficulty in getting promotions later on, lower retirement income).