A geographic sore spot for exchange premiums

Print Friendly and PDF By: Andy Miller Published: Sep 26, 2013

clipboardThe Obama administration is touting the competitiveness of the new insurance exchanges as an attractive feature of the Affordable Care Act.

About 95 percent of American consumers will have a choice of two or more health insurance issuers, and often many more, the U.S. Department of Health and Human Services said Wednesday in announcing premiums for federally run insurance exchanges in 36 states, including Georgia.

But in two regions of southwest Georgia, there’s only one insurer offering coverage –- Blue Cross and Blue Shield of Georgia. And the premiums in that corner of the state are much higher than in the rest of Georgia.

In Region 1, which includes Albany, the lowest-cost ‘‘silver’’ plan for a 21-year-old is $360.61 per month,  the highest in the state. In region 15, also in that area, the same plan is $330.53.

But in metro Atlanta, the cheapest silver plan for a 21-year-old is $179.20, matching the rate in regions in northeast and northwest Georgia. That’s half the Albany region rate.

The statewide average for the lowest-cost silver plan is $304.

The costs of care are high in southwest Georgia, said Bill Custer, a health insurance expert at Georgia State University. It  has a large proportion of people with chronic disease, and in addition, there is a lack of competition among medical providers there, he said.

The dominant hospital system, Phoebe Putney, in 2011 acquired its only hospital competitor in Albany. The Federal Trade Commission challenged the deal in court, calling it anti-competitive. The case was settled several weeks ago, and Phoebe retained control of the former Palmyra Medical Center.

Blue Cross is the only health insurer offering coverage in every region in the state.

In the metro Atlanta market, where half the state’s population resides, health insurance companies are offering a number of different plans. Custer of Georgia State noted that there are significant variations in premiums between insurers in competitive regions like Atlanta.

Gary Cohen, an official of the federal Centers for Medicare and Medicaid Services, acknowledged to reporters Thursday that competition tends to keep rates lower.

But Cohen also predicted that the success of the exchange will eventually draw more insurers into non-competitive regions.

“Some [insurers] have decided to step back and see how it goes,’’ Cohen said during an Association of Health Care Journalists webcast. “My expectation is that [when] companies see the influx of new people coming into the health insurance coverage system, and it really does work . . . I think there will be very strong interest of more entrants to come in the second year.’’

Experts note that the premium is not the only figure that a consumer must consider when looking at the cost of an insurance plan. Another key factor is the deductible, the amount consumers must pay each year before their health plan starts picking up the costs.

Nationally, the annual deductible for a midrange silver plan averaged $2,550 in a sample of six states studied by Avalere Health, or more than twice the typical deductible in employer plans, the Associated Press reported.

The big difference in the medal plans is cost sharing through annual deductibles and co-payments. Bronze covers 60 percent of expected costs, and silver 70 percent, on up to platinum at 90 percent. Bronze plans have the lowest premiums and the highest cost sharing.

On Thursday, an Obama administration official said the federal government will delay online enrollment for small businesses in federally operated exchanges, pushing the date back from Oct. 1 to Nov. 1, Reuters reported.

The official, who spoke on condition of anonymity, said small businesses that want to purchase coverage for their employees will still be able to enroll beginning Oct. 1, but will have to do so through paper applications, in-person meetings or over the phone to a federal call center.

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