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General interest items edited by Janice Flahiff

Explore causes of regional variations in premiums | Association of Health Care Journalists

 Explore causes of regional variations in premiums | Association of Health Care Journalists

Excerpts from the 4 March 2014 blog item

The regional variations are more complicated. It’s not as simple as labor costs in New York being higher than those in Arkansas.

Competition is a big factor. The highest prices aren’t necessarily in a big city. Some of the highest rates are in rural areas with few health care providers and scant competition to drive prices down.

Narrow networks, where there are fewer doctors and hospitals, or at least fewer name-brand hospitals, are also a factor. Not all consumers want these – although some are willing to make that tradeoff to save money.

There also may be fewer insurers offering coverage in the exchanges in some areas. Even where competition is minimal, the medical loss ratio in the Affordable Care Act limits how much profit an insurer can make or at least limits how much of the premium people pay can be used for nonmedical purposes – including profit. They have to rebate the money if they don’t meet MLR.

Local health care history and how it has affected incentives and efficiency is a factor. For instance, Minnesota, which has some of the lowest premiums, has been working on delivery system, integrated care and managed care for years.

Also, regional oddities – such as a mountainous section of Colorado that has to medevac people by helicopter – can play a role in why one section of a state pays more than others.

Jordan Rau of Kaiser Health News has written about the cheapest and most expensive markets nationally. Katie Kerwin McCrimmon of Health News Colorado has written about the controversy in Colorado about why people in one community pay more than people in an adjacent community. (Here and here).

 

 

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March 14, 2014 - Posted by | health care | ,

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