Health Zip Code Pricing

[realistagent]

I'm new to the health biz and I find it amazing that premiums can fluctuate so much depending on the zip code of a families residence. I just finished comparing pricing between two neighboring zip codes and the average difference was 25%. Can anyone expalain the reasoning behind this.

 

[realistagent]

Yes, both are in the same state.

 

[Crabcake Johnny]

I sat next to the head of the underwriting dep't for Assurant at their last conference and asked him that very question. The answer; a lot of factors.

*Access to the closest hospital
*Average price for treatments at that hospital
*Rating of the closest hospital
*Average price to see a doctor in your zip code
*Quality of doctors in your zip code

In MD you can live in 21122 zip code and you'd go to North Arundel - a good but average hospital. One zip code away and you're a Mercy Medical Center which is state of the art.

In one zip code doctor's average fee to see a patient might be $80. Another zip code it might be $110 and it all makes a difference.

 

[realistagent]

Still doesn't make sense. The two Zips I compared have almost exact similarities as to the conditions you mentioned.

 

[J.R.]

I sat next to the head of the underwriting dep't for Assurant at their last conference and asked him that very question. The answer; a lot of factors.

*Access to the closest hospital
*Average price for treatments at that hospital
*Rating of the closest hospital
*Average price to see a doctor in your zip code
*Quality of doctors in your zip code

In MD you can live in 21122 zip code and you'd go to North Arundel - a good but average hospital. One zip code away and you're a Mercy Medical Center which is state of the art.

In one zip code doctor's average fee to see a patient might be $80. Another zip code it might be $110 and it all makes a difference.

What resource do you use to verify the quality of a hospital?

 

[Crabcake Johnny]

Forgot about the biggie - past claims experience. For whever reason is the average cost per patient is $180 in 21114 and $125 in 21113 then rates will reflect that.

Don't try to make too much sense of it. Why would insurance companies refuse to cover an entire state? Golden Rule doesn't think they can turn a profit in CA?

 

[Crabcake Johnny]

What resource do you use to verify the quality of a hospital?

Go have fun here: http://www.healthgrades.com/

And does the hospital rating matter? http://www.eurekalert.org/pub_releases/2005-10/h-hsn101205.php

 

[somarco]

Zip code price differentials reflect the underlying "discounts" of the PPO network(s). If the MCO is able to negotiate more favorable discounts from providers in 30327 than they are providers in neighboring 30328 the rates will reflect those differentials.

Other factors that come in to play include proximity to trauma centers and the respective levels of those trauma centers, utilization, social demographics.

Typically, high income zips have greater utilization and higher claim levels than low income zips.

Of course getting an actuary to admit that is like trying to learn the secret formula for Coca-Cola.

 

[ap76]

Don't try to make too much sense of it. Why would insurance companies refuse to cover an entire state? Golden Rule doesn't think they can turn a profit in CA?

I have heard that Golden Rule will eventually start offering health insurance in California - has anyone else heard anything along those lines?

 

[Aspire]

GoldenRule in CA

I have heard that Golden Rule will eventually start offering health insurance in California - has anyone else heard anything along those lines?

United HealthCare GoldenRules Parent Company is already selling in California with their Small Group product. From what I understand they will also be marketing individual products here at some point. Of course UFC also own PacifiCare which already sells IM (Individual Medical) in California and other states that GoldenRule branded products are not in.