A New York State senator says residents of his state may be paying more for life insurance because insurers rely on national mortality data that pools New Yorkers with shorter-lived populations elsewhere—including Texas.
Democrat James Skoufis argues that the practice could influence billions of dollars in annual premiums paid by New Yorkers.
His proposal—the TEXAS Act, short for the Terminate Excessive Cross-state Actuarial Subsidization Act—would require insurers operating in New York to use state-specific mortality data when setting rates, rather than relying on national averages that combine residents from different states.
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“A hidden subsidy—invisible but very real—flows from blue state policyholders to red states every month,” Skoufis wrote in a recent op-ed published in the Houston Chronicle.
Skoufis argues that insurers use national mortality tables that smooth over state-level differences, effectively grouping longer-lived New Yorkers with residents of states that have lower life expectancy.
“Your state isn’t as healthy as ours. Why make us pay for that?” the senator asked.
How Big Is the Life Expectancy Gap?
Life expectancy varies significantly across the U.S. The latest data from the Centers for Disease Control and Prevention shows that Americans can expect to live to roughly age 79 on average—76.5 years for men and 81.4 years for women.
The geographic gap is substantial. CDC life tables for 2022 show nearly an eight-year difference between the highest- and lowest-ranking states.
Hawaii ranked first at 80 years, followed by Connecticut at 79.8 years and New York at 79.6 years.
At the bottom of the rankings was West Virginia at 72.2 years, followed by Mississippi and Kentucky. Texas fell closer to the middle of the pack at 77.1 years.
Skoufis attributes New York’s longer life expectancy to investments in public health, workplace protections and social services, while arguing that policy decisions in some Southern states have contributed to poorer health outcomes.
“By refusing to expand Medicaid and provide structural support systems, Texas politicians have created a state where 16.8 percent of adults have no health insurance compared to 4.9 percent of New York’s population—more than three times New York’s rate,” Skoufis wrote.
Despite its relatively long-lived population, New York remains one of the most-expensive states for life insurance.
Financial comparison platform SuperMoney says that the states with the highest average permanent life insurance rates are:
New York: $1,500 per yearCalifornia: $1,480 per yearFlorida: $1,470 per yearTexas: $1,450 per yearIllinois: $1,430 per year
Those with the lowest average permanent life insurance rates are:
North Dakota : $450 per yearIowa: $460 per yearIdaho: $470 per yearSouth Dakota : $475 per yearWyoming: $480 per year
The same states were also in the same lists of the top five for average term life insurance rates, which provide coverage for a specific period, such as 10, 20, or 30 years.
New York was once again No. 1 with an average annual premium of $600 per year.
Would the Proposal Actually Lower Premiums?
Insurance experts told Newsweek that Skoufis is highlighting a real issue—national pricing models can mask regional differences—but argue that geography is far from the biggest factor in determining premiums.
^Skoufis would have a point if the only thing that mattered in determining the premium a life insurance buyer pays was an aggregate mortality table,” Rob Hoyt told Newsweek. He is Moore Chair and Professor of Risk Management and Insurance in the Terry College of Business at the University of Georgia.
“However, life insurance pricing and underwriting decisions typically consider various factors including age, health status, family health history, lifestyle, tobacco use, gender, driving record, and occupation,” Hoyt said.
Those factors already capture much of the variation in life expectancy seen across states, he added.
Mary Pat Campbell is a Fellow of the Society of Actuaries and a Member of the American of Actuaries and a New York resident. She told Newsweek that she also questioned whether state-level mortality data would meaningfully alter pricing.
“People who purchase individual life insurance generally have lower mortality rates than the population as a whole,” Campbell said.
High-risk activities, tobacco use and medical history typically matter far more to insurers than a policyholder’s state of residence, she added.
Hoyt said that Skoufis’ proposal is unlikely to significantly reduce premiums for New Yorkers.
Because insurers already account for many of the factors driving mortality differences, state-specific pricing may have little practical impact on rates, Hoyt said.
He added that requiring insurers to maintain separate state-based pricing systems could increase compliance and administrative costs, potentially pushing premiums higher overall.
The TEXAS Act was referred to committee in May and has not advanced.
Whether it gains traction may depend on lawmakers accepting Skoufis’ central argument: that state-level health outcomes should play a larger role in how life insurance risk is priced.