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Older widowed and divorced women lack health insurance options

Too few health insurance options exist for widowed or divorced women ages 55 to 64, according to an updated study released May 2002, by the Families USA Foundation.

Annual premiums for individual standard health plans in 50 states for healthy, non-smoking women, ages 55 to 64

Annual Premium
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Rhode Island
South Carolina
South Dakota
West Virginia 
Average Premium
X = No Standard plan available.
Source: Families USA

The report, "A 10-Foot Rope for a 40-Foot Hole: Tax Credits for the Uninsured - 2002 Update," finds that while the majority of these women have health insurance, those who are uninsured have difficulty finding quality, affordable health insurance. The report stems from an earlier report, "Too Few Options: The Insurance Status of Widowed or Divorced Older Women," released in 2001 by Community Voices: HeathCare for the Underserved and Families USA.

Income and race are big factors

Widowed and divorced women are at higher risk of going uninsured because they are poorer than both the men in their age group and their single (never been married) and married counterparts, according to the report. Additionally, minority women share a disproportionate part of the burden.

For instance, nearly a third of all women — but only a quarter of men — in this age group have annual incomes below $25,000. These women are also three times more likely to have annual incomes below $10,000 as their married or single counterparts, 22 percent vs. 7 percent. In addition, among widowed or divorced women, ages 55 to 64, nearly 16 percent of whites are uninsured, compared to 25 percent of nonwhite women.

The steep financial burden on widowed and divorced women is contributing to an insurance gender gap that is putting the health of women at risk," says Ronald F. Pollack, executive director of Families USA. "Widowed and divorced women are more likely to be uninsured, unemployed, and low income. Insurance programs need to be tailored to make it easier for older women to obtain the health coverage they need."

Recommendations to improve coverage

In response to the concern of Americans without health insurance, the report states that several policymakers have proposed the enactment of tax credits to help uninsured people purchase coverage. One proposal, developed by President Bush, would provide a tax credit of up to $1,000 for low-income individuals or up to $3,000 for low-income families. The credit would be available only to those who do not have insurance coverage through their employers and who are not eligible for Medicaid.

However, according to the report, in many cases, $1,000 plans were simply not available. And if they were available, they generally provided incomplete coverage, had high deductibles, and required high coinsurance or copayments.

The earlier report, "Too Few Options: The Insurance Status of Widowed or Divorced Older Women," released in 2001 by Community Voices: HeathCare for the Underserved and Families USA, concludes with the following four recommendations to improve the availability and/or affordability of health insurance options for older widowed or divorced women:

  • Subsidize COBRA coverage: COBRA offers a short-term solution to people who have had employer-sponsored coverage but have lost that coverage due to job loss, widowhood, or divorce. (See Know your COBRA rights.) However, many people don't take advantage of this option because the premiums can be costly.

For example, the plan must also allow you to pay premiums on a monthly basis if you want. To offset the extra administrative costs of servicing a COBRA participant, the plan may charge up to an additional 2 percent of the normal group premium. So, if the monthly group health insurance premium — including both your contribution and your employer's contribution — was $600, you could be charged up to $612 each month.

  • Improve regulation of the private insurance market: States should adopt additional regulations that will ensure health insurance is both more available and more affordable in the private insurance market — the only recourse for uninsured people who have exhausted COBRA and who are ineligible for Medicare or Medicaid.

The report points to states that have adopted "guaranteed issue" requirements that prohibit health insurance companies that sell individual policies from denying coverage to any applicants based on age or health status. But guaranteed issue doesn't make these policies affordable and most of them are prohibitively expensive. Some states, however, limit the premium difference based on age that insurers may charge. With "community rating," New York goes the furthest. In New York, insurers must charge the same premium for comparable policies for all purchasers, regardless of age or health status.

  • Expand Medicaid coverage: Current federal law already allows some flexibility to expand Medicaid for adults, such as parents, pregnant women, and the disabled (read Understanding Medicaid). However, most states have set very low income eligibility levels for adults, with the exception of pregnant women. A proposed regulatory change would allow states to expand coverage for the "medically needy." Under this proposed rule, individuals who otherwise meet the eligibility requirements for Medicaid, but who have income or assets that are too high, would not have to "spend down" so much of their income and assets before qualifying.
  • Establish a Medicare buy-in: Because the youngest women in this study are only 10 years away from becoming eligible for Medicare at age 65, the study concludes that Medicare is the natural place to look for expanding coverage for this population of women (see Understanding Medicare). In addition, Medicare doesn't employ many of the private insurance practices, such as medical underwriting or limitations on pre-existing conditions, that affect the availability and affordability of private insurance.

While the premiums under the proposed Medicare buy-in would fall in the $300 to $400 range, and a plan to cover prescription medicines under traditional Medicare has been approved by the Bush administration, it would give older individuals an alternative to the individual insurance market.

Premiums in the individual insurance market

While health care analysts argue that many older widowed and divorced women can't afford monthly COBRA premiums — and would also be hard-pressed to afford the monthly premium for a Medicare buy-in — the 2002 study reveals that these two are actually often less costly alternatives to most of the individual health insurance policies currently sold by private insurers throughout the country. The 2002 updated report examines the annual premiums for individual health insurance policies in 50 states for women ages 55 to 64. Depending on age and location, the report shows that the average annual premium for a healthy, non-smoking, 55-year-old woman was $4,934. In 18 of the states, premiums for healthy, non-smoking, 55-year-old women were higher than $5,000. The highest premiums were $7,620 in Colorado, $7,399 in Nevada, and $7,392 in Louisiana.

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