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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.

Aired 3/12/13 on KPBS News.

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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Avatar for user 'philosopher3000'

philosopher3000 | March 12, 2013 at 9:52 a.m. ― 4 years ago

I'm moving to a cheaper area.

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Avatar for user 'philosopher3000'

philosopher3000 | March 12, 2013 at 9:54 a.m. ― 4 years ago

I always thought insurance gets cheaper if the pool is larger, why divide up the pool?

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Avatar for user 'JeanMarc'

JeanMarc | March 12, 2013 at 10:22 a.m. ― 4 years ago

They should divide the pool by level of health. I do not want to be in the same pool as the 300 pound person who eats fast food all the time and never works out. My insurance should be the absolute cheapest, I work out 5-6 days a week and eat very healthily. Please take me out of the same pool as the overweight or people who live high-risk lifestyles where their odds of contracting HIV are extremely high.

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Avatar for user 'Alex_Grebenshchikov'

Alex_Grebenshchikov | March 12, 2013 at 10:29 a.m. ― 4 years ago

I'm not quite sure I understand the rationale behind dividing the state by geography either. Is it because insurance companies are not allowed to segregate by age, occupation, etc.? Those factors would make more sense for health insurance premiums. If they are only allowed to divide by geography, maybe the idea is to guess what parts of the state people would likely be healthier than average, and so on. For example, people in the most impoverished communities are not likely to spend extra money on healthy, quality foods and incorporate sufficient vegetables into their diets, and they may be the most likely to grab a large soft drink. They may not even be educated in nutrition at all. Sadly, McDonalds is cheaper than healthy food.

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Avatar for user 'DeLaRick'

DeLaRick | March 12, 2013 at 11 a.m. ― 4 years ago

I'm sure the intent of this measure is to decrease medical insurance companies' premiums to a level commensurate with medical costs in any particular region. There is a disparity in the rates medical insurance companies (payers) negotiate with health care providers. The cost variances are usually due to volume and regional factors. It's the "behind the scenes action" that consumers rarely get to see.

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | March 12, 2013 at 2:20 p.m. ― 4 years ago

This seems really complicated to me.

We just need a single-payer system, take the bloody insurance companies out of the mix together.

I'm even OK with a public/private venture, I think there are aspects that each can contribute (private= health technology and competative edge, government= fairness, health justice, and sound public health measures).

But we need a single-payer system without insurance companies.

The sooner we realize this is the best way to go, the better off our nation will become.

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Avatar for user 'wallallison'

wallallison | March 13, 2013 at 12:32 a.m. ― 4 years ago

really interesting comments about poor people, fat people, HIV/high risk people, uneducated people, etc.. the whole point of obama-nightmare-care is for that very list of people who can't afford healthcare (poor/poverty), or who have pre-existing conditions (possibly fat people and/or HIV/high risk people) to actually receive health insurance, and get care, and for the cost to be evenly spread out - isn't that what 52% of the country voted for during the presidential election when obama was re-relected and obamacare's fate was sealed? now all you "healthy" people are complaining about that and/or concerned how it is going to affect your wallet. wow - amazing. if all you healthy living people were to be involved in a car accident that led to you needing a great deal of medical care, i'm sure the poor/poverty/fat/HIV/high risk/uneducated people wouldn't balk at having to help pay the cost for your care. some perspective would be good, that wasn't degrading to others.

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Avatar for user 'benz72'

benz72 | March 13, 2013 at 7:36 a.m. ― 4 years ago

Presumably the insurance company of the individual at fault would be paying for the required care in the scenario you describe.

As a curiosity, if we subscribe to the idea that we cannot disincentivize unhealthy behavior by refusing to pay for the problems it causes are we not then obliged to use social pressure to mitigate the adverse effects such behavior will have on us? If not by social pressure, what feedback mechanism do you propose to limit that impact?

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Avatar for user 'Really123'

Really123 | March 13, 2013 at 9:08 a.m. ― 4 years ago

Ok benz72. A woman is preganant and can't afford prenatal care or delivery charges. How do you propose we limit that impact?

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Avatar for user 'JeanMarc'

JeanMarc | March 13, 2013 at 9:55 a.m. ― 4 years ago

wallallison I wouldn't need poor/fat/unhealthy/gay people to pay for my healthcare because I have health insurance.

People should pay a premium for problems they create. If they are poor, that should be a great motivation for them to stop spending money on cigarettes, fast food, etc. the effects would be beneficial if people learned to live without the comfort of a government hammock under them (not a safety net) so they can lay down and quit participating in society whenever they want, for as long as they want.

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Avatar for user 'JeanMarc'

JeanMarc | March 13, 2013 at 9:56 a.m. ― 4 years ago

Really123 about pregnant women, how to avoid those costs? Lets see... maybe... maybe someone who cannot afford to give birth to a child (let alone raise a child) should try NOT HAVING BABIES?

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Avatar for user 'Alex_Grebenshchikov'

Alex_Grebenshchikov | March 13, 2013 at 10:02 a.m. ― 4 years ago

wallalison, let us assume that we all want fairness in healthcare. Obamacare is forcing everyone to play in the healthcare game, so if we really want "the cost to be evenly spread", should we not make sure everyone pays their fair share? Now I am no communist, quite the opposite, but I'll play along. The way to make sure everyone is contributing equally is to look at the total one has to pay for health related expenses in their lifetime. The totals should be equal. We can evaluate two groups of people:

Group one - these people pay extra money for gym memberships, sports, quality foods that maintain their optimal health, etc.

Group two - these people save a lot more money than the group one people on the front end of their lives because they don't exercise (no gym fees, sports expenses) and they have terrible but cheap diets (McDonalds, chips, soda).

At this point, group one has paid a lot more towards healthcare. Later in life, group one will continue to enjoy good health and have few medical expenses, while group two will experience rapidly declining health and the medical expenses will start to mount. If both groups are required to pay the same amount into health insurance, group two will overall pay much much less money into healthcare. Essentially, they are rewarded for destroying their bodies, while group one is punished by having to pay tremendously more money into healthcare over their lifetime.

Essentially, "spreading the cost" is not helping the people who need medical help the most, it is simply enabling them to continue unhealthy and destructive lifestyles with greater ease. Spreading the cost is killing the people who need medical care now and in the future. They can abandon responsibility for themselves because they won't have to bear the full expense.

For groups one and two to pay equally for healthcare over their lifetimes, group two must pay significantly higher health insurance premiums. After a generation, you will see a much healthier america, and healthcare will be less of a crisis.

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Avatar for user 'Really123'

Really123 | March 13, 2013 at 10:34 a.m. ― 4 years ago

JM and Alex. You guys are just lumping everyone into a neat little compartment and wrapping it up with a bow. These situations are not black and white.

Regarding pregnant woman- JM what are you going to do? Yell at her and tell her to deliver her own baby? Force her to have an abortion?(Who pays for that?) You don't anything about her background or how she ended up in this situation. What if she IS poor, does she not have a right to have children? If you say no, what are you going to do, force sterilization? See, none of these issues are neat and tidy. My gut instinct is to say the same thing you said, but when you stop and think about it, it's just not that easy.

Alex- so there are only two types of people in the world? Those that work out and those that eat McD? I hope none of those healthy people have any genetic predisposition to some sort of illness that would lump them into the "users" group that eats McD. There are all sorts of people that fit somewhere in between these two simple descriptions. Your example strikes me as a Fox-ism. It's us and them, and no room for anything else.

Lastly, only 4% of the USA population depends entirely on welfare. Look it up.(By the way, most are white.) Can we please stop with obsessing on these few people and start talking more about the other 96%.

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Avatar for user 'JeanMarc'

JeanMarc | March 13, 2013 at 10:38 a.m. ― 4 years ago

Really123 you used a key phrase there, "right to have children"

That is the entitlement attitude that is destroying this country.

"I am poor, I can't support myself, but it's my right to have a baby! So I will, and taxpayers will pay for it!"

Where do we draw the line? Where is the line between a persons rights and a persons desires?

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | March 13, 2013 at 10:55 a.m. ― 4 years ago

A lot of comments on here by people using crude stereo-types about the poor, gays and anyone else you want to classify as "unfair to provide healthcare to".

Unless any of you people have spent the thousands of dollars it takes to have gene alanysis, none of you have the right to assume YOU won't be a burden on society at somepoint as we pay for your illness.

Very, very few people pay for health insurance outright.

It's immensely expensive and out of reach for even middle-income earners.

The vast majority of us receive it through our employers.

I don't care if you are a fit young white heterosexual male with insurance, that does not mean you can't lose your job, get into an accident, and then need public assistance for your health care.

The way some of you people talk, you act as though you are robots not made of flesh and blood.

The bottom line is ANYONE WITH A BODY (which I think includes pretty much everyone including the self-proclaimed princesses of society on their soap-boxes in here) cannot recuse themselves from the healthcare system.

You have a body, you are a liability, and you cannot predict when and what type of health care you will need.

Grow up people, we are a SOCIETY.

What happens to one person affects us all.

Even the rich capitalists who don't want to pay for helping out the poor when they become ill have ties to this - think about it, an unhealthy "working poor" population without adequate access to health care makes for a less productive workforce and has implications that run straight up to the top.

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Avatar for user 'jskdn'

jskdn | March 13, 2013 at 11:20 a.m. ― 4 years ago

I downloaded Anthem's last rate increase submission a while ago from California Department of Insurance website and was shocked by range of rates for the same policy depending on the geographic area. There were 7 geographic rate areas and the highest had about 75% higher premiums than the lowest. I'm glad there will be geographic rates and I'm hoping there will be transparency regarding the variations that might lead to needed changes. The differences could be a useful guide for attacking the biggest health care problem: cost. There is considerable evidence that the practice of medicine evolves differently in different places and that there are large differences in spending unrelated to better health outcomes. One possible advantage of the kind of divided health care system we have is that better-performing outliers could point the way to improved practices. Of course there was no reason why the public shouldn't have known about the currently existing geographic variations and their potential for improving the system, other than the state of journalism.

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Avatar for user 'Alex_Grebenshchikov'

Alex_Grebenshchikov | March 13, 2013 at 11:49 a.m. ― 4 years ago

Really123, really? On the CDC website (look it up), 69.2% of adults age 20 and older are overweight or obese. The majority of health problems are self inflicted, so I am not convinced that a broad socialist type law should be enforced based on an emotional argument using, as its foundation, a minority group of people in between the two majority groups. Even if we remove the emotional aspect of this problem and ignore what actually causes the illness, etc. in people that need medical attention, we need to ask who is responsible to pay for the medical care. What is the government's duty and responsibility? To protect us from foreign invaders? Sure. To make everyone pitch in and pay for everyone in the country to have health insurance? Not so sure. Why should we pay for others to have healthcare? Perhaps because it is morally right? Maybe, but moral to who? What is moral to one is immoral to another, so how does the government decide on the standard of morality it will impose? Rather, the government should stay out of moral issues as much as possible and allow people to be as free as possible from the oppression of imposed morality, taxation, and other communist practices. Americans will learn quickly to be strong and independent again, like they were when the country was founded.

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Avatar for user 'benz72'

benz72 | March 13, 2013 at 11:52 a.m. ― 4 years ago

R123, I propose that we limit the impact declining to subsidize her.

PDSD, you are correct that everyone has a body and that they will all, at some point, fail. What you do not seem to account for in your statements is that not all bodies are worth the investment to delay that inevitable outcome.

As to health care costing so much, it is a highly regulated market with extreme barriers to entry and a risk averse body of practitioners who have to pay very high costs for mistakes. What would you expect prices to be like?
I agree that there should be cheaper health care options, but until people are willing to accept 'discount health care' as a viable alternative we aren't going to see them.

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Avatar for user 'JeanMarc'

JeanMarc | March 13, 2013 at 1:54 p.m. ― 4 years ago

Peking, I didn't mean to say it is unfair to provide healthcare to anyone. If I sounded that way, I apologize. What I meant is that it is not fair for me to pay the same rate for my insurance as someone who completely neglects their health and who will most likely end up costing their insurance company much more than someone who is health conscious.

Everyone can be insured and receive healthcare of course. But the same way reckless, irresponsible drivers are charged higher premiums, so should people who disregard their health pay higher health insurance premiums. That seems fair to me.

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Avatar for user 'CaliforniaDefender'

CaliforniaDefender | March 13, 2013 at 3 p.m. ― 4 years ago

People like Really123 feel "progressive" if they treat disease rather than prevent disease because it results in immediate gratification. They never examine the cause.

We have only two rational and compassionate options:

1. Provide universal healthcare free of charge, but prohibit unhealthy lifestyle choices (fast food, alcohol, tobacco, etc) and require annual physicals like jury duty.

2. Maximum personal freedom but no government funding of healthcare. Uninsured are only admitted to non-profit charity hospitals that rely on private donations to operate.

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Avatar for user 'benz72'

benz72 | March 13, 2013 at 3:13 p.m. ― 4 years ago

Can I cast a vote for option 2 now?

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Avatar for user 'jenjen'

jenjen | March 13, 2013 at 4:22 p.m. ― 4 years ago

JeanMarc so how about sports injuries? If someone CHOOSES to go mountain bike riding on a dangerous trail, or falls off the cliff they're climbing, or wrecks their knees running, why is it society's responsibility any more than the costs that might accrue from lack of exercise? How is it morally differentt, other than a notion of "ew"?

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Avatar for user 'benz72'

benz72 | March 14, 2013 at 7:37 a.m. ― 4 years ago

If I may ask you jenjen, why do you suppose that those cases should be treated differently? Do you see a distinction between acute and chronic problems that would cause them to be paid for differently?

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Avatar for user 'RegularChristian'

RegularChristian | March 16, 2013 at 7:46 a.m. ― 4 years ago

WE all pay for health insurance either directly or indirectly. Directly: through our policy premiums, copays, deductibles and out-of-pocket expenses. Indirectly, through taxes and other budget allocations. Nothing is free.

When uninsured people receive medical care, we all pay for them. Thank God. I'd hate to live in a society where we turn our backs on our less fortunate brothers and sisters. I also hope Obamacare will keep my insurance company from raising my premiums 30% every year, as they have for the last four years.

I look forward top the changes as a positive step. WE can do it. We're the richest country in the world!

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Avatar for user 'benz72'

benz72 | March 18, 2013 at 8:39 a.m. ― 4 years ago

You are certainly right that nothing is free. That is why many of us believe that the program is unsustainably expensive. Charity may be laudable, but confiscation is not.

We are the richest country in the world, with the largest debt in human history. The bill will come due and we cannot afford to give everybody everything they want. We also cannot afford to have too many moochers who believe that they are entitled to someone else's earnings because they happen to be from the same country.

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Avatar for user 'RegularChristian'

RegularChristian | March 19, 2013 at 7:17 a.m. ― 4 years ago

They money is there. We just need to tax the affluent at reasonable rates. They've had too good of a deal at everyone else's expense for far too long. The money is there and we don't need to damage the economy by impoverishing the middle class.

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Avatar for user 'JeanMarc'

JeanMarc | March 19, 2013 at 3:11 p.m. ― 4 years ago

Did you know that even ALL of the wealth of people who have over one million dollars would only run our government for about 30 days?

Sorry, the problem will not be solved with taxes. There is simply not enough money to take from the people.

The only way to solve this problem is to stop spending money we don't have.

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Avatar for user 'Alex_Grebenshchikov'

Alex_Grebenshchikov | March 19, 2013 at 4:05 p.m. ― 4 years ago

RegularChristian, how have the affluent had "too good of a deal", and how is their good deal "at everyone else's expense"?

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Avatar for user 'JeanMarc'

JeanMarc | March 19, 2013 at 4:27 p.m. ― 4 years ago

I suspect he won't be able to answer those questions.

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