Washington — A 60-year-old living in Hartford who wanted to buy the most modest policy from the state’s health exchange will have to pay at least $610 a month.
But if that same 60-year-old lived in Vermont, he or she could buy similar coverage for $346.
A 27-year-old in Hartford who wanted to buy a medium-coverage plan would pay a minimum of $235. But if he or she moved to Sacramento, the cheapest similar policy would cost $265 and $207 in Denver.
The Affordable Care Act affects all Americans who, starting Jan. 1, are required to have health insurance. Those who choose to buy coverage from newly created state insurance exchanges will find widely differing choices depending on where they live.
Some states will raise your rates if you smoke. Others, like Connecticut, won’t. Many states will offer expensive “platinum” plans with extensive coverage and few out-of-pocket costs. Connecticut won’t. A few states won’t charge older people more than younger people for the same insurance policy. Connecticut will.
“The way (the exchanges) were structured allow a lot of variation between the states,” said Linda Blumberg, an economist at the Urban Institute’s Health Policy Center.
The health insurance exchanges, which supporters like calling “marketplaces,” will make their debut in October when consumers will be able to start shopping for health policies that would take effect Jan. 1.
Consumers in Connecticut will have three insurers to choose from in the individual market and in a separate market set up for small businesses to buy coverage for their workers.
Within those markets will be three levels of coverage, bronze, silver and gold, with gold having the most extensive coverage and lowest deductibles and co-payments. Monthly premiums will depend on the level of coverage and the insurance company chosen. Some insurers will offer HMOs, which limit the doctors and hospitals offered in a plan, others will offer more generous preferred provider networks. There will also be cooperatives or other types of plans.
Individuals in Connecticut will be able to choose from several plans offered by ConnectiCares, Anthem and a new insurer called Healthy CT.
Kevin Counihan, CEO of Access Health, the name of Connecticut’s exchange, said premiums in that exchange were influenced by the high cost of health care coverage in the state.
“We have the fourth-highest insurance costs in the country,” he said.
Neighboring Massachusetts is No. 1.
Where do you live, and do you smoke?
Shoppers of policies through Access Health won’t only see wide differences in the price of a policy based on age, there will also be variances based on where you live.
Counihan said that’s because there are regional difference in the cost of medicine. He said a colonoscopy that costs $850 in Litchfield may cost up to $3,200 in Fairfield County.
“One of the biggest geographic differences in premiums can be attributed to the practice pattern,” Blumberg said. “Doctors in one area (of the country) may make intensive use of services for a condition than those in another area.”
Cost of living also factors in regional differences. It cost much more for a doctor to set up shop in Manhattan than rural Tennessee – or even suburban New York City.
Claire McAndrew, senior health policy analyst at Families USA, said there’s another reason for the wide variety in the price of health care from state to state — the amount of regulation and restrictions on insurance rate increases,
“Some states have strong practices and some do not,” she said.
Counihan said the decision to part ways with states that plan to surcharge smokers (including Maryland, Kentucky, Colorado and Alabama) was made by the Access Health Board of Directors.
“The decision was made because there was a thought that it would disproportionately penalize poor people who tend to smoke,” he said.
Many state exchanges will offer expensive “platinum” plan with no or low deductibles and co-pays and generous coverage. Counihan said there wasn’t much of a market for that in Connecticut.
“It didn’t seem practical,” he said. “We want to be focused as we can to offer things people can buy.”
Many v. a few policies
While individuals shopping for coverage in Connecticut will have only three insurance companies to choose from, Massachusetts residents will have 10.
New Yorkers will have 17. And, unlike in Connecticut, the policy a 20-year-old New Yorker purchases will cost the same for his 64-year-old neighbor.
New York will adjust that premium depending on where in the state you live. But in Vermont, age and address will not affect the price of an insurance policy.
In some states, like Ohio, state officials say policies in the exchange will cost more than those purchased by individuals and companies that are on the market now.
Chris Brock, communications director for the Ohio Department of Insurance, said much of the 41 percent average premium increase expected in his state can be attributed to the ACA’s requirement that policies in the exchange offer a list of essential services that include mental health coverage and oral and vision care.
Ohio is among 26 states that chose not to create its own exchange. Under the Affordable Care Act, the federal government will create the exchanges in those states, most of which have Republican governors.
But in Connecticut and most other “blue” states, it’s a different story.
Vermont (a bit of an outlier)
Susan Donegan, commissioner of Vermont’s Department of Financial Regulation, said policies in her state’s exchange will be cheaper than those offered on the open market and “we’ll have a very robust benefits package.”
The reason: Vermont has been moving toward a government-run health care system for years and has already instituted many reforms.
In Connecticut, Counihan said, there won’t be much difference in policies bought through the exchange or the open market.
“I was kind of surprised about that,” he said.
But there’s an incentive to purchase a policy on the exchange. Low- and moderate-income individuals and families could be eligible for federal subsidies to help pay their premiums. Small business could receive tax breaks. And the exchanges will offer access to Medicaid for low-income individuals and families who qualify, allowing them to receive health care at little or no cost.
Although Connecticut and more than a dozen other states finalized the premiums that will be charged in their exchanges, many states, like Massachusetts, have not.
They face an Aug. 31 deadline to do so. Some may not make it.
Connecticut on track
Since Connecticut is on track, it will be the second state, after Kentucky, to receive a visit from officials from the Centers for Medicare and Medicaid Services to review Access Health’s proposed operations and certify them. The CMS visit is scheduled for Aug. 22.
“They are going to kind of kick the tires,” Counihan said.
For Blumberg, the most interesting thing to watch as the state exchanges begin operations next year will be in how successful they will be in signing up the uninsured.
“There will be significant differences in participation,” Blumberg said. “But,” she predicted, “some of those differences will evaporate over time.”
In Connecticut, it’s expected that 80,000 to 100,000 of the state’s 337,000 uninsured residents will find coverage through the exchange in its first years of operation.