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Location Will Make A Difference In Price Of Health Insurance

— Where you live may play a big part in how much you'll pay for health insurance next year. California lawmakers are considering splitting the state into 19 different pricing regions.

Geography will play a bigger part in determining the price of health insurance in California next year.

Health reform aims to make the cost of health insurance more transparent, and to encourage competition in the marketplace.

That's the rationale behind dividing the state into different regions.

Starting next year, insurers will no longer be allowed to factor in preexisting medical conditions or place lifetime limits on coverage. Geography will be one of the only ways companies can vary premiums.

Nicole Evans, vice president of communications for California Association of Health Plans, said it makes sense.

"In some places, health coverage is much more expensive than in others, so it's important that the pricing reflects your community, because folks in lower-cost areas shouldn't have to subsidize those who live in the higher-cost areas," Evans explained.

Anthony Wright, executive director of the nonprofit Health Access California, said insurers will find it tough to game the system. That's because all counties except Los Angeles will lie within one particular region.

"And if they price too highly in a given area, whether it's a rural area or a urban area, there will be other insurers that will be bidding in that area, that hopefully will undercut them," Wright said. "And that's the point, that the competition is actually based on cost, rather than on avoiding sick people."

State lawmakers are scheduled to review the bills that contain the regional pricing system this week.

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