One Price for Denver, Another Price for Colorado Springs, and So On…
November 8, 2013
November 8, 2013
Hat tip to the Denver Post Daily Dose blog for this chart comparing the cost of Affordable Care Act silver-level individual policies by insurer and market.
I have a few thoughts about this. First, that seems awfully cheap. Many years ago in Chicago, my wife had a year (or so) period where she was too old to be on her dad’s insurance, and I was still a year away from employer-provided insurance, so we shopped for an individual policy for her. If I remember correctly, the cheapest policy without maternity coverage was roughly $170/month – about 20 percent less that the cheapest Denver 27-year-old policy (and about 50 percent less than the most expensive one. Keep in mind that she was only 25, the coverage was almost certainly skimpier, and this was more than a decade ago when health care inflation was between 2 percent and 4 percent. (Assuming an average rate of 3 percent, that means her $170/month policy should now be about $230/month, which is more than a lot of these policies.)
Second, the transparency is awesome. Say what you want about the ACA, but the ability to compare comparable policies is hugely convenient, and it eliminates a lot of confusion provided the policies really are relatively comparable (more on that in a second).
Third, I’m a bit surprised at the variability between policies and geographic markets. Yes, I know that not all silver-level policies have the exact same benefits, but the difference in Denver between the high and low for a 27-year-old is more than 80 percent. For Grand Junction it’s close to 100 percent. Either the benefits are way different between these policies (in which case, it reduces the helpfulness of the ACA level groupings), actuarial pricing is a lot less of an exact science than I thought, or maybe a bit of both.
Similarly, I’m surprised at the price differences between markets. For the policies that can be issued in every market, the difference between the high and low prices are 105 percent, 66 percent, 26 percent, 65 percent, and 74 percent, respectively (using the pricing for a 27-year-old). Some companies can sell the same policy in different parts of Colorado for a modest 20-odd percent premium, but others need to more than double the price. That’s strange. While there seems to be some general trends – the metro areas are cheaper than the nonmetros – the pricing within those bands is a more variable. Sometimes Denver is less expensive than Boulder; sometimes it’s not. That would lend some credence to the theory that pricing is much more flexible than you’d think.
I don’t have a clever conclusion or takeaway from this. It’s just cool to be able to see pricing laid out in a simple chart.