For those who don't have the luxury of employer-paid health coverage, finding out what individual coverage costs can be a challenge.
A new study that the Kaiser Family Foundation released in early August could help to make it easier. The foundation analyzed data compiled by Mark Farrah Associates to determine the average premiums for individual health insurance across the U.S. last year.
While the national average monthly premium per person was $215, the prices were all over the place, from a high of $437 in Massachusetts to a low of $136 in Alabama.
The Causes Behind the Costs
Why so much difference? According to the Kaiser Family Foundation, there's plenty of reasons for the range: cost of living; state demographics, such as age distribution; varying health-care costs; the plans' effectiveness at controlling costs; the benefits offered by the different plans, the patient cost-sharing required; and others.
In some places, a higher price is partly due to reforms. Massachusetts and Vermont, for example, require people with pre-existing health conditions to be able to enroll. In states where medical underwriting is permitted, rates may be lower because the risk pools include a healthier-than-average population.
Then too, just because premiums are lower in some states doesn't mean those patients are necessarily better off. People enrolled in those plans may have to pay higher deductibles or co-payments that offset their savings in premiums.
What It Means for You
What's the takeaway? Shop wisely. "There are a lot of variations," says Gary Claxton, vice president of the Kaiser Family Foundation. "Think about what level of coverage you want. Then, don't rely on one source of information. Check out online brokers as well as an insurance agent."
Know too that even if you live in a state where premiums are high, it doesn't mean you will have to pay top dollar. "Look for plans where you can pay a higher deductible," Claxton says. "You'll get the protection you need at a lower premium, though if you only go to the doctor a couple of times a year, you might have to pay for that out-of-pocket."
In 2014, the Affordable Care Act kicks in. That will mean big changes in how you can buy health insurance on your own. Start studying up now so you'll be ready to make smart moves when they do. Knowledge can give you the power to pay lower premiums.