Thoughts on Health Insurance for 2015
What you pay for health insurance is governed mostly by where you live.
Being self-employed I have the joy of buying for health insurance for myself. Aetna discontinued my current plan for 2015. Did I mention just how much I hated Aetna? Last week I used HealthCare.gov to check my options. The application starts with your ZIP code.
I started thinking: how different are health insurance prices between cities?
Short answer: up to 107% more.
The experiment
Which cities?
I picked nine cities for various reasons:
| Location | Reason |
|---|---|
| Lancaster PA | I live here |
| Austin TX Brooklyn NY Portland OR San Francisco CA |
Design/tech cities |
| Asheville NC Boise ID |
Friends and family |
| Salt Lake City UT | I read their health costs were lowest in 2014 |
| Miami FL | Random geography |
What persona?
I used a persona based on myself:
- Individual plan
- Excluded from income subsidy
- 28 years old
- Non-smoker
- Non-parent
- Not pregnant
Note: individuals earning over $46,680 are ineligible for subsidies. I saw the same plans/prices testing with $50k, $100k, and $500k income.
What pricing benchmark?
I want low premiums and high deductibles. Normal health care will never bust my out-of-pocket max, but any hospitalization probably will. Based on my age, fitness, and environment it’s a small risk that I have savings to back up.
Which plans?
My pricing benchmark meant either:
- Catastrophic plans
- Under 30 my health risks are minimal (aka indestructible).
- Bronze plans
- Over 30 some catastrophic plans are income restricted, so I might be forced into bronze plans for 2017.
Catastrophic plans
| Location | Premium | % Mean | Deductible | OOP Max |
|---|---|---|---|---|
| Asheville NC | $156 | +3% | $6600 | $6600 |
| Austin TX | $137 | -9% | $6600 | $6600 |
| Boise ID | — | — | — | — |
| Brooklyn NY | $154 | +2% | $6600 | $6600 |
| Lancaster PA | $107 | -29% | $6350 | $6350 |
| Miami FL | $180 | +19% | $6600 | $6600 |
| Portland OR | $128 | -15% | $6600 | $6600 |
| Salt Lake City UT | $139 | -8% | $6600 | $6600 |
| San Francisco CA | $208 | +38% | $6600 | $6600 |
| Mean | $151 | — | $6531 | $6531 |
- Bargain:
-29%Lancaster,-15%Portland - Expensive:
+38%San Francisco,+19%Miami
The out-of-pocket max for an individual in 2015 cannot exceed $6600. Only Lancaster had a plan under the max. Boise had no catastrophic plans for me (probably an income exclusion).
Bronze plans
| Location | Premium | % Mean | Deductible | OOP Max |
|---|---|---|---|---|
| Asheville NC | $220 | +13% | $6275 | $6400 |
| Austin TX | $165 | -15% | $6300 | $6300 |
| Boise ID | $156 | -20% | $3950 | $6350 |
| Brooklyn NY | $308 | +58% | $3000 | $6350 |
| Lancaster PA | $167 | -15% | $4000 | $6350 |
| Miami FL | $190 | -3% | $6500 | $6500 |
| Portland OR | $149 | -24% | $5250 | $5250 |
| Salt Lake City UT | $157 | -20% | $6300 | $6300 |
| San Francisco CA | $245 | +26% | $4500 | $6250 |
| Mean | $195 | — | $5119 | $6228 |
- Bargain:
-24%Portland,-20%Boise,-20%Salt Lake City - Expensive:
+58%Brooklyn,+26%San Francisco
Only Portland had a significantly lower out-of-pocket max.
The results
- Portland stands out in both tiers as a bargain.
- Lancaster, Boise, and Salt Lake City are economical.
- Brooklyn and San Francisco are crazy expensive — surprise.
Annual liability range
Comparing premiums vs premiums + OOP max these are the best/worst cities:
Catastrophic plans
$1284 min$7634 maxin Lancaster$2496 min$9096 maxin San Francisco
Bronze plans
$1788 min$7038 maxin Portland$3696 min$10046 maxin Brooklyn
In conclusion
Where you live may swing health care costs heavily:
+107%for using no health care.+43%for using maximum health care.
What I’m actually paying
Lancaster is super affordable for me. My doctor is in-network, so I bought the $107/mo catastrophic plan. The next plan up was $145/mo with negligible benefit differences. I wager on staying healthy and pocketing the extra $456.
Compared to prior years:
| Year | Provider | Plan | Premium | Deductible | OOP Max |
|---|---|---|---|---|---|
| 2013 | Aetna | PPO High Deductible 3000 with HSA | $88 | $3000 | $3000 |
| 2014 | Aetna | PPO High Deductible 3000 with HSA | $91 | $3000 | $3000 |
| 2015 | Capital Blue Cross | Healthy Benefits Value HMO 6350 | $107 | $6350 | $6350 |
| YOY Difference | +17.5% | +111.6% | +111.6% |
Switching from PPO to HMO should’ve been cheaper, but it wasn’t. That’s the cost of national healthcare reform.
On the bright side, it’s just me. Insuring a family is crazy expensive.