What do Aspen, Colo., rural southwest Georgia, and the western edge of Wisconsin have in common? They’re among the most expensive places in the country to buy a health plan on healthcare.gov, according to data compiled by Jordan Rau of Kaiser Health News.
In these three areas, the cheapest midlevel “silver” plan for a 40-year-old costs from $381 to $483 per month without subsidies. The national average for silver plans is about $270 per month, according to a Kaiser Foundation subsidy calculator.
The most expensive places to buy insurance aren’t necessarily the most expensive places to live. While Colorado’s ski resort towns and wealthy Fairfield, Conn., make the list, high-cost cities such as New York and San Francisco offer more affordable coverage than rural Nevada or Wyoming.
“They’re mostly rural and low-population-density areas,” says Jonathan Wu, an economist with insurance-comparison website ValuePenguin. The company created a data visualization to compare insurance coverage and prices across the country.
Several factors can drive up insurance premiums. In markets where few insurers sell coverage, the companies may be able to dictate higher prices. Most of Wyoming has only two insurers offering exchange plans; in Nevada, much of Mississippi, and southern Georgia, it’s just one. Likewise, areas with only one hospital or health system have more leverage to set higher rates for insurers. The overall health of the population may play a role, too, as people with more chronic illnesses incur higher medical costs.
All these factors are at play in southwest Georgia, Kaiser Health News reports in a separate story. The region is dominated by one hospital system (whose expansion federal regulators have challenged as anticompetitive). Only one insurance company is offering plans through the healthcare.gov exchange, which lower-income people need to use to get subsidies. The area also has high rates of chronic disease.
And regulation is mixed in. Vermont, for example, has among the highest average premiums for a 40-year-old because the state bars insurers from charging different rates depending on age. That makes it one of the lowest-cost states for people in their 50s and 60s but one of the most expensive for younger people.
In rural areas, medical providers have fewer patients to pay for the fixed costs of running hospitals or clinics, so on a per capita basis those costs will be higher, Wu says. He also notes that the cost of transporting people long distances to treat medical emergencies may contribute to the higher prices in less populated areas. That probably helps explain why Alaska is on the list.
Sometimes people in places just a few miles apart pay strikingly different amounts for insurance. Take the border between Wisconsin and Minnesota. The Twin Cities and surrounding areas have some of the lowest insurance rates—a 40-year-old there can buy a silver plan for $155 a month, ValuePenguin’s data show. Just across the St. Croix River in Wisconsin, the same plan costs $465 per month, one of the highest rates in the nation.