Black people have more heart attacks, white people are more likely to develop Seasonal Affective Disorder in the same geographic region, etc. It’s nothing to do with predicting behaviour, it’s just differing physiologies, causing different levels of risk of certain physiological conditions irrespective of the choices we make or how we’re raised.
As well, different races respond better or worse to different drugs. There might be a cheap way to treat hispanic people for a condition but only an expensive way to treat any other race. In that situation, if there was actuarial data saying that Hispanic person A and non-Hispanic person B had an equal chance of developing that condition, it would make sense for person B’s premiums to be higher, no?
If you can predict, per person, not only the chance of an event causing a condition requiring an insurance-covered response; but also predict, per person, the size of the total insurance pay-out from a given event, then people who will need more expensive treatments for the same condition will need higher premiums. It’s like flood insurance: insuring a house closer to the coast costs more, but insuring a larger house also costs more. Because the pay-out will have to be higher to fix a larger house, even though the flood was the same. Same damage—more expensive solution required.
There seems to be a difference between the different ethnic groups.
The result is a healthy 26mo white man gets overcharged and a pregnant, unhealthy, overweight 40yo black woman is undercharged. Usually this just means the 26yo chooses not to get insurance.
(Men are cheaper because they don’t have as many routine medical exams, they don’t go in to the doctor generally even when they should, they don’t get pregnant and their health problems seem to include sudden out-of-hospital death more than chronic conditions. That makes them substantially cheaper to insure even if not actually “healthier”.)
Pre existing conditions and known upcoming things (like, planning to get pregnant) or superior knowledge of one’s health status and risk profile make health insurance a really defective marketplace.
Just because it’s illegal doesn’t mean it doesn’t happen. Discrimination in the case of insurance, advertising, housing, etc happens by zip code.
Live in the wrong zip code and you’re screwed.
The ACA provides a similar legal protection for gender in health insurance. We just need to extend that protection to car insurance.
Nothing to do with race, more about social standing. Black people tend to be less educated/affluent. Poor diet -> obesity -> heart attacks. 33% of whites are obese, while 48% of blacks are obese. Much more information can be found here: https://stateofobesity.org/disparities/
>white people are more likely to develop Seasonal Affective Disorder in the same geographic region, etc.
Again, nothing to do with race. White people tend to live in places like Alaska, Maine, etc. which have long and cold (and dark) winters.