Where You Live Determines Health Insurance Costs
By Julie Appleby
Sun, Sep 29 2013
By Jordan Rau
When buying health insurance, where you live matters. In Pennsylvania and more than a half dozen states, consumers in some cities will pay at least 50 percent more for the same type of coverage than their friends and relatives in other parts of the state.
A 40-year-old in Philadelphia, for instance, will spend $300 a month to buy a mid-level insurance plan in the new Obamacare marketplace -- 77 percent more than a 40-year-old in Pittsburgh, where the same type of coverage will cost a more modest $169 a month. Lower-income people eligible for federal subsidies will spend less.
Consumers in Georgia, Wisconsin, California, Arizona, Missouri and Florida will also see wide variations, ranging from more than a 100-percent cost spread between high- and low-cost regions of Georgia, to 82 percent in Wisconsin and 52 percent in Florida.
Long a fact of life in the world of insurance brokers, rate variations within a single state have been thrown into sharp relief because for the first time, consumers can compare prices for comparable products by logging into the new online marketplaces. Earlier this week, the Obama administration released average premium prices for the policies that will be sold in the 36 states whose markets are being overseen entirely or in part by the federal government.
“Identical people with identical incomes will face very different choice and cost of plans,” said William Custer, director of the Center for Health Services Research at Georgia State University
For instance, a 40-year-old in rural southwest Georgia would pay $481 a month for a midlevel plan - more than double the cost of someone in the eastern portion of the state, where the premium is $238.
And in California, a 27-year-old buying insurance in Los Angeles will pay $209 a month, 56 percent less than his counterpart in in El Centro, near the Mexican border, who will pay $325. Those premiums are for the second lowest cost plan in the “silver” level of coverage and don’t include subsidies, which will bring down the cost for many consumers.