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Insurance Department Action Promotes Equity, Allows Insurers to Collect Race and Ethnicity Data

04/08/2022

โ€‹Harrisburg, PA โ€“ Acting Insurance Commissioner Michael Humphreys announced today that the department has submitted statement of policy to the Pennsylvania Bulletin that will allow insurers to ask applicants to voluntarily provide race and ethnicity data on insurance applications in an effort to promote equity initiatives. The new statement of policy ends enforcement of a prohibition on data collection originally published in 1969.

"Health insurers can play a critical role in helping the Commonwealth identify better practices and pathways to healthcare equity," said Humphreys. "The collection of race and ethnicity data are especially important to understand how health care services are being utilized, who is more likely to use them, and the effects the treatments and related insurer consumer-centric programs have on the patient's quality of life." 

Recognizing the valuable information health insurers can provide, the department has consistently communicated with insurers on equity issues and research in health insurance. In doing so, the department has received valued feedback from insurers, specifically requests from insurers to collect self-reported data from their members, to enhance the existing guidance for the betterment of underserved communities. 

To foster diversity, equity and inclusion efforts, the department is issuing a statement of policy of non-enforcement of the prohibition under ยง 89.12(e), and will permit entities issuing insurance products regulated by the department to collect race and ethnicity data on an application for diversity, equity, and inclusion purposes only. Further, because Pennsylvania's insurance laws clearly prohibit discrimination, including discrimination based on race and ethnicity, the department clarifies that both questions as to "race or color" and data collection will be permitted when asked or collected in a manner that promotes health equity. Unfair discrimination remains prohibited. 

In light of the discriminatory uses to which race and ethnicity data have been used in the past and statutory prohibitions against unfair discrimination, an insurer may find it necessary to assure the applicant of the insurer's non-discriminatory purposes for the data collection.  An insurer soliciting race and ethnicity data may be expected to clearly articulate to prospective members:

 

  • why the data is being requested;
  • how it will support efforts to provide equitable care;
  • how the data will be maintained as private; and
  • that their disclosure of demographic data is:
    • Voluntary, with "prefer to not answer" and "other" options available for all demographic questions.
    • Based on self-identification.

In 2020, the National Association of Insurance Commissioners created the Special Committee on Race & Insurance, focusing specifically on the need to "consider enhanced data reporting" to identify race and other sociodemographic factors of consumers. 

In addition, the Biden Administration has focused on data collection, issuing an Executive Order titled "Advancing Racial Equity and Support for Underserved Communities through the Federal Government." Consistent with that directive, the Centers for Medicare & Medicaid Services of the Department of Health and Human Services, in its proposed Notice of Benefit and Payment Parameters for 2023, has recommended requiring insurers to report race and ethnicity data to address health equity.

"The Pennsylvania Insurance Department has remained committed to diversity, equity and inclusion, recognizes there is still work to be done, and looks forward to being part of a broader solution to aid vulnerable populations," said Humphreys. "We encourage and appreciate insurer efforts to identify existing disparities, evaluate the effectiveness of initiatives to address those disparities, and ultimately create a pathway to eliminate those disparities within the commonwealth's insurance marketplace." 

The Unfair Insurance Practices Act and the Affordable Care Act protect insurance consumers from racial and ethnic discrimination. However, if a consumer believes they have been subjected to unfair discrimination for any reason, they are encouraged to contact the Consumer Services department by calling 1-877-881-6388 or online.

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