Why is health insurance so costly in Virginia? (Roanoke: to buy, deductible)

[rednblue]

I recently interviewed for a couple of jobs in the Roanoke area. I was shocked at the cost of health insurance and am wondering why it's so high compared to Pennsylvania's (where I currently live). Currently I pay less than $1400/year for a very comprehensive medical and dental plan for my family. My employer contributes an additional $7,500 or so. A comparable plan in the Roanoke area would cost me about $14,000/yr at one place and about $5,000 at the other. These costs are after the employer contributions are factored in

Does anyone have an idea why there is such a huge difference between rates in VA and PA and are there generally such big discrepancies in employer contributions?

[Blue Moon Athena]

I have found the same to be true, having recently moved to Virginia from Florida. The cost for similar medical coverage is about 22% higher.

Conversely, the cost of auto insurance is less than half of what it was in Florida. And for somewhat better coverage to boot.

[seanpecor]

I'd like to know what health insurance provider would charge over $1,000/month in Virginia!

We are a family of 4 and recently switched our insurance. Our old Anthem BCBS coverage - which we had since 2004 - was about $700/month. I'm a self-employed dotcom developer so that's the full cost. With that said, we were apparently being overcharged because there were alot of unhealthy people in that group. We were quoted about $550/month for a separate "PPO 30" plan. However, we ultimately decided to go with the new type of insurance that is joined with a Health Savings Account (HSA). My company can contribute up to around $5,000 a year to our HSA and we can utilize that money for co-pays and for approved medical expenses not covered by our plan. As a result, our insurance premium is less than $300/month It's the perfect plan for us because I was trying to structure a plan that my company could pay for; the goal being to reduce the amount of profit that is taxed federally at 35%.

Car insurance would likely be cheaper in Virginia because vehicle theft is much lower and there are much fewer octogenarians in Virginia driving land yachts capable of causing swaths of destruction across our highways

If you want sticker shock, move to Vermont. We were paying over $1,000/month in Vermont in 2004 prior to our move. I imagine it's about $1,500/month now.

Sean

[rednblue]

Good information. I'll contact Anthem directly and see what I come up with. The plan that I referred to with the high price tag was actually the mid-range Anthem plan offered by the employer. The employer contributes around $400 of the $1500 monthly premium. Dental insurance is a seperate. I'm confused about the huge difference in costs.

[whynot?]

This is really not my area of expertise, but one reason may be variations in state laws. As I understand it, each state actually has mandates for what "must" be covered by insurance companies offering policies there. So states that mandate higher levels (or more comprehensive) coverage, would probably have higher rates to offset the anticipated outlay by the insurance companies.

The Council for Affordable Health Insurance actually publishes an annual overview of the mandates with a state-by-state comparison. You can download the 2007 PDF here: www.cahi.org/cahi_contents/resources/pdf/ (broken link)MandatesInTheStates2007.pdf

It's hard to view the state-by-state chart online, but if you're really inclined, you can print it out to see if this could be a reason for the higher rates in general.

[seanpecor]

$1,500/mo is just insane. I've never seen quotes that high and we were looking at the absolute best Virginia health insurance products with the lowest copays and deductibles for a family of four. It sounds like your potential employer's group consists of chain smoking alcoholics who race motorcycles naked or something

Sean

[alice_61]

I'm wondering if the difference was between employer insurance contribution, not the general cost of insurance in the two states. We have had to buy our own individual coverage for the past 5 years. In Pennsylvania, the cheapest individual Blue Cross plan for our family would have been>$450/month. That has been attributed to the very high malpractice insurance rates in PA. The cheapest Blue Cross coverage in NC was ~$360/month. We just moved to VA and Blue Cross here is $260/month. Needless to say, we are very happy with the lower rates in VA, since this is where we plan to stay. My guess is the company in VA is less generous with benefits than the company in PA.

[rednblue]

That is part of the picture. My employer in PA contributes about $630/month towards my plan and I contribute an additional $120. This amount includes dental. My individual deductible was raised from $250 to $1000 this year, but my employer pays anything over $500 through a reimbursement. I'm seeing now what a generous plan this is. The total premium in PA is $750/month, roughly half the amount quoted by the employer in VA. It just doesn't make sense, especially in light of the quotes individuals are getting independently. Maybe it's like Sean said-"a bunch of chain smoking alcoholics..."

[alice_61]

The low individual rates that I quoted were for the healthiest rating, a very high deductable: $10,000, and no dental. Most group plans don't require underwriting so the premiums are higher than the rates that we were eligible for.