Community Differences in Obamacare’s Costs

As the Affordable Care Act, also known as Obamacare, goes from concept to reality and people enroll in plans, the differences in what people have to pay for coverage is becoming an important part of the story. Those disparities can be dramatic and they are directly tied to the communities in which people live. Crossing a county line can mean costs increases or decreases of hundreds of dollars for essentially the same coverage.

There are political implications in those variances, as American Communities Project Director Dante Chinni noted in the Wall Street Journal last week. But underneath those political splits are deeper differences in our communities and the forces that shape them. Those community-driven differences become clearer through the prism of the ACP when you look at the states using the federally run heath insurance exchange.

ACP Type

Average Lowest Premium for a Silver Plan, 21-year-old

Average Median HH Income

Native American Lands (40 counties)



African American South (368 counties)



Military Posts (77 counties)



Graying America (239 counties)



Working Class Country (284 counties)



College Towns (109 counties)



Evangelical Hubs (319 counties)



Rural Middle America (506 counties)



Exurbs (170 counties)



Urban Suburbs (59 counties)



Aging Farmlands (151 counties)



Middle Suburbs (70 counties)



Hispanic Centers (131 counties)



Big Cities (26 counties)



LDS Enclaves (40 counties)



The differences in that chart are broad, $50 a month between the cheapest Silver plans in the LDS Enclaves and the Native American Lands counties. That’s a difference of $600 over the course of 12 months.

And, as noted in the Wall Street Journal piece, there are some urban/rural splits in the data. On average, bigger urban areas seem to avoid the high end of the premium spectrum, with the Big City counties faring especially well with an average monthly premium of about $185. That is despite the fact that those urban communities – the Big Cities, Urban Suburbs and Exurbs – tend to have higher median HH incomes. So in “real” terms they are paying much less as a percentage of their income on average.

There are subsidies, of course, depending on income and cost of living, but the ACP has run different scenarios and income through the Kaiser Family Foundation’s subsidy calculator and found that in many cases it wouldn’t make a difference unless an enrollee earns very little.

Many assumed the insurance premiums would in some ways be tied to income, with poorer people and places paying less. What’s going on?

The rates have little or nothing to do with the incomes of the people around them. Instead the differences above are a side effect of having the new healthcare law built on top of the old private insurance system that was already in place. The differences aren’t due to random chance. Providers knew the communities they served, knew their competition and priced plans accordingly.

Look at the LDS Enclaves for instance. Why would rates in those communities be lower? One big factor is the large number of Mormons in them who do not drink and, more important, don’t smoke. Only 7% of the people who live in LDS Enclaves smoke cigarettes, according to data from Experian Marketing Services. That’s by far the lowest number in the ACP and far below the national average is about 18%.

That means people in those communities are far less likely to smoke or to be exposed to second-hand smoke. Clean living, even living around clean living, has its benefits.

The Enclaves also have the largest percentage of people under 21 years old, 36%, and young people tend to be healthier.

In the Big Cities, the lower rates are likely due to more options. Look through the Big City counties on this set off interactive maps on the Wall Street Journal’s site and in most cases you will find many more plans available in those places than their rural counterparts.

There are 12 Silver plans in Miami-Dade, a Big City county in Florida, with lowest option costing a 21-year-old $193 a month. Next door in Monroe County, Graying America in the ACP, there are only four Silver options, with lowest-priced one ringing in at $274 a month.

The county types with the most expensive premiums in the chart above, the Native America Lands and African-American South, share a combination of problems that push their rates higher. Both tend to be fairly rural, so less competition. And, according to polling data from Gallup, both are far above the national average for Body Mass Index. And Native American communities are often known high rates of alcoholism.

There are a number of factors that go into the rest of the figures above, as well. The College Towns, for instance, have a younger population, but also an older population there to serve them and often rural areas around them – not to mention, high-end expensive hospitals. Graying America has an aging population and somewhat rural population. And while the Aging Farmlands are also graying, many of those counties are so rural there is not a lot of high-end medical care nearby – the Gallup polling data also indicate those places are more fit, going by Body Mass Index.

The insurance premiums here represent a moment in time, of course, and they may change as the marketplace changes.

The larger point, however, is with the ACA your community plays a role in what you will pay for the health coverage – in some cases and places it plays a big role. And, beyond simple politics, those different costs are likely to affect how people come to view the law.

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