Obamacare means more workers are getting health insurance. And that could mean more money for women.
First, women spend more on health care than men. On average, a woman spent $5,246 on health care in 2012, compared with a man’s average of $4,125, according to the Health Care Cost Institute. This is partly because women paid higher insurance premiums — insurers used to be able to charge women more than men for the same health plan, a practice that was banned by the Affordable Care Act. But women also have higher costs because they use more health services: They are more likely to go to the doctor when they get sick, they live longer, and they have babies.
So the Affordable Care Act is saving women money on premiums. But it could also save them money each time they go to the doctor, because more women are getting health coverage instead of paying out of pocket. Big employers are required to offer it, the ACA insurance exchanges provide more choices for individual shoppers, and parents can allow their daughters to stay on their plans longer under Obamacare. More insured women means more women who can split the cost of health care with their insurance company.
But that’s just the tip of the iceberg on why the Affordable Care Act could boost women’s income and help close the gender wage gap, says Amy Allina, deputy director of the National Women’s Health Network.
Allina says the health law’s new coverage options mean women don’t have to worry about insurance when looking for a job, and that means they are more likely to shop around and find the best job with the highest wage or highest earning potential — not the one with the best health benefits.
Not relying on an employer for health insurance reduces the feeling of “job lock,” the idea that people stay in a job that otherwise pays poorly or does not offer opportunities for advancement because they depend on the health coverage provided by the employer.
Women are more likely to stay in a job for health insurance than men, because women value health insurance more, says Heidi Hartmann, an economist who is also the president and founder of the Institute for Women’s Policy Research.
“Women have higher out of pocket health care costs than men, and anything that improves your disposable income by reducing your costs is likely very valuable,” Hartmann said.
Hartmann and Allina agree that the freedom to shop around for a better job is important — and Allina says the flexibility can help young women pick a high-paying job that will set the bar on their lifelong earnings.
“If you look forward in their lives and see what the benefit is of starting at a higher wage, they will likely have higher earnings over the course of their life,” Allina said. “Your starting place affects your ending place in terms of lifelong earnings.”
She points to some evidence from states that allowed young adults to stay on their parents’ plans before the Affordable Care Act was passed. In those states, a recent study from the Journal of Health Economics found, young adults saw a modest wage increase from staying on their parents’ plans. For men, staying on their parents’ plans meant they could stay in school and get a better degree — hence the wage bump. For women, Allina says, that increase in earnings came at least in part by the flexibility of shopping around for a higher-paying job.
But not everyone agrees that Obamacare will lead to a healthier financial future for women. Some economists reject the idea that there are good-paying jobs that women just can’t take because they don’t offer health benefits.
“Wouldn’t that be nice if it were actually true?” said Joe Antos, a health economist at the American Enterprise Institute, whose résumé includes time at the Congressional Budget Office and the Health and Human Services Department. “Jobs that don’t offer health insurance typically pay less. They’re aiming at a lower skilled part of the labor market. Taking a higher paying job that didn’t have health benefits is a non sequitur.”
According to the Census Bureau’s 2012 American Community Survey, 93.5 percent of full-time, private-sector workers earning annual salaries upward of $80,000 were receiving health insurance from their employer.
But that’s not the only reason some economists doubt the Affordable Care Act will have a positive effect on the gender wage gap. They also say that the costs associated with having health insurance still reduce overall income.
Katherine Baicker, an economist and a professor at the Harvard School of Public Health, who also serves as an adviser to the Congressional Budget Office, points out that women who don’t get their insurance from their employer — whether they’re staying on a parent’s plan or shopping for coverage on their own — are still paying a portion of their wages toward the cost of health insurance. A job that offers health insurance probably pays less than a job that offers no benefits, but that’s because health insurance carries a monetary value when employers are evaluating an employee’s total compensation.
“Having health insurance in and of itself seems unlikely to affect the gender wage gap,” Baicker wrote in an email.
Whether the health law will make a dent on the gender wage gap isn’t clear. In fact, one economist offers an even bleaker outlook: Obamacare will actually widen the income disparity between men and women.
Andrew Biggs, a former Social Security Administration official and a current scholar at the American Enterprise Institute, says the health law creates an incentive for women to work less because they’ll be able to get health insurance elsewhere — and that will expand the gender wage gap.
“The gender pay gap is driven almost entirely by women taking time out of the workforce to have kids,” said Biggs. “To reduce the gender pay gap, essentially women have to work more. But women’s labor supply is more sensitive than men’s is. You have some women who are working so they could get health insurance. If they could get it without working, you may have less working.”
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