Monthly Health Insurance Premiums Highest in Spokane, Wash., Among 69 Cities, Survey Finds
kaisernetwork.org
Daily Health Policy Report
July 21, 2006
Health insurance costs the most in Spokane, Wash., and costs the least in Grand Rapids, Mich., according to a survey of 69 cities released on Wednesday by eHealthInsurance, the Miami Herald reports. The survey examined monthly premiums for health insurance for a family of four nonsmokers with a maximum deductible of $2,000 and 20% coinsurance. According to the survey, Spokane had the highest monthly premiums at $962, and Grand Rapids had the lowest at $159.06. The New York City and Boston areas had monthly premiums that ranged from $865 to $916, the survey finds. Bob Hurley, a vice president with eHealthInsurance, said that state health insurance mandates accounted for a large share of the differences in monthly premiums among the cities surveyed. He added, “In very heavily regulated states, prices are horrendous.”
http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=38638
The Most Affordable Cities for Children’s & Family Health Insurance
eHealthInsurance
July 19, 2006
Most of the cities surveyed that rank near the bottom are in states with community rating and guaranteed issue laws.
http://www.miami.com/multimedia/miami/news/afford.pdf
Comment:
By Don McCanne, M.D.
eHealthInsurance is frequently cited as the resource that proves that high-deductible policies are very inexpensive. But their own report demonstrates that this is not always true. It is very important to understand why.
Mandated benefits are frequently blamed for the high insurance premiums in some states. But this accounts for only a modest variation between states, and does not explain the variation between cities within a single state. For the healthy young family described, benefits can be quite generous without much impact on premiums.
Regional variations in utilization, especially of non-beneficial high-tech services, account for part of the differences, although much of that is concentrated in the Medicare population and has less impact on the private plans that cover healthy families. But some of the costs of these excess services may be shifted to the private plans.
Neither benefit mandates nor regional variations in utilization can account for a 6-fold difference in premiums in various cities. So what does?
eHealthInsurance provides us with the answer, although they bury it in a marginal comment in their report. Defining the “bottom” as the highest premiums, they state that “most of the cities surveyed that rank near the bottom are in states with community rating and guaranteed issue laws.” In other words, those states that require insurers to provide the insurance function of pooling risk will have much higher premiums because the large health care costs for the sick are shifted to the many who are healthy. That is the fundamental principle of insurance. For the coverage described, lower premiums are possible only in those states that allow private insurers to skim off the healthy and leave the sick behind. But then how would you pay for the sick since they consume about 80 percent of our health care spending?
Another major concern about this report is that the study was of a plan with a high-deductible ($2000) and 20 percent coinsurance (as opposed to nominal copayments). The average family that develops significant medical problems will find that this level of cost-sharing creates a financial barrier to health care access, with resultant impaired health outcomes.
A universal risk pool that eliminates financial barriers to care is the only practical answer. Since the average family cannot afford the premiums that would be required, the pool must be funded equitably through progressive tax policies.
The private insurance industry will never provide coverage that pools all risks, eliminates financial barriers to care, and charges a premium based on ability to pay. Single payer national health insurance is the answer. Why do we keep evading the obvious?