Sweeping differences in health care exchange pricing among states and counties is leading to sticker shock for some middle-class consumers and others who aren't eligible for subsidies under the Affordable Care Act.
The average prices for the most popular plans are twice as high in the most expensive states as those with the lowest average prices, according to a USA TODAY analysis of data for 34 states using the federal health insurance exchange.
INTERACTIVE COUNTY BY COUNTY MAP
PPOs, the most popular type of health care plan, carry monthly premiums that range from an average of $819 a month in the most expensive state to $437 in the least expensive. Plans on the federal and state exchanges are grouped into four categories that cover 60% to 90% of out-of-pocket costs. USA TODAY looked at the pricing of PPOs and HMOs across these bronze, silver, gold and platinum categories.
The premiums for bronze-level plans are generally the least expensive, but "the deductibles are simply not affordable," says Laura Stack, a former financial analyst looking for full-time work and using her 401k to pay for health insurance. "Many will not be able to afford the per person deductibles before insurance begins to pay. What are you really paying for?"
About 4.4 million people in the individual insurance market are not eligible for the subsidies and tax credits that can help cover premiums and out-of-pocket costs, including deductibles.
Insurance brokers and "navigators" helping people apply for insurance say there are shockingly high prices for some consumers who aren't eligible for subsidies. Without much competition in some states and because they know so little about their new customers, insurers may have priced higher than they would have otherwise.
After Washington, D.C.'s exchange posted insurers' proposed rates - something few other states did - three out of the four insurers refiled lower rates and one of them did it twice.
Insurers "don't have to and in most cases they won't compete until you force them to," says Mila Kofman, executive director of the D.C. exchange and the former superintendent of insurance in Maine.
"The insurance carriers are preparing themselves for the worst, so perhaps they will reduce their premiums, but I doubt they will have enough data to make that call before 2015," says Rob Nelson, a self-employed property and casualty insurance broker who was able to keep his canceled policy another year.
•Wisconsin is one of the top five most expensive states when it comes to average HMO prices, USA TODAY found. Before subsidies, Wisconsin navigator Brad Gingras says he was "astounded" by some of the prices that those who don't qualify for subsidies would have to pay. Every one of the subsidy-eligible consumers his office has helped was "100% positive" about the plans they got - once the process was complete.
•Wyoming has the highest average cost for all of its HMO offerings at $778 a month. Navigator Julia Heemstra, director of the wellness department at St. John's Medical Center in Jackson, Wyo., had a similar experience. She spends a lot of time talking to Wyoming residents to help them understand why health care costs are so high in a big state with the smallest population in the USA.
•Texas ranks as one of the most affordable states for both PPO and HMO offerings, with average monthly premiums of $200 to $250. Still, Wichita Falls insurance broker Kelly Fristoe says his individual policy customers are finding premiums are 30%-50% higher for next year. Lately, he's been enrolling people in the exchange who were in the state's high risk pool. These people have found the exchange plans cost slightly less or the same as their old plans. Only about 20% are eligible for subsidies. Others making above 400% of the poverty level "are just angry when they do have to make a change because for the most part they are going to have to pay more money," Fristoe says.
•Ralph Webster, 62, of Kitty Hawk, N.C., says his health insurance premium for a Blue Cross/Blue Shield plan is going from $401 a month to $747. His old plan was canceled, and the best plans the insurer could offer both on and off the exchange cost the same. Dare County is one of the 18% of counties with just one insurer on the federal exchange, USA TODAY's analysis shows.
Department of Health and Human Services spokeswoman Joanne Peters says most consumers will get a better deal on the exchanges, both in price, out-of-pocket costs and coverage.
"But we know a small slice of consumers may not be eligible for a plan at a more affordable price," she says. "That's why we are allowing insurers to continue offering plans that would have been canceled for another year."
Wendy Wolf, 64, who isn't eligible for a subsidy, saved $10 a month and got better coverage with a plan on the federal exchange after her Blue Cross/Blue Shield plan in Philadelphia got canceled. Her co-payments are lower, she has no deductible and she appreciated the fully covered preventive care in the new platinum plan, which costs $1,022 a month.
"I'm much better off with my new policy," she says.
Those complaining about pricey exchange options were probably benefiting before from what's known as "risk segmentation," says John Holahan, a fellow at the Urban Institute's Health Policy Center. That is, healthy people who were buying individual insurance got a break on premiums because they were grouped with other healthy people when premiums were set. The Affordable Care Act prohibits this kind of "medical underwriting," because it penalizes people who are older or in poor health. States have some leeway to limit variation further, but insurance rates for older people are generally capped at three times that of younger adults.
The ACA is " trying to say we want to pool risk and share the costs as broadly as we can so that everyone is protected by affordable insurance throughout their lives, at times when they think they will be healthy and at times when it turns out that they are sick," Holahan says.
People who get insurance through their employers - most workers do who work for companies that are self-insured, as most big companies are - are used to being grouped in pools where they may be paying more or less than they would have been individually because the cost of their employer insurance is based largely on the health of the others at their company, Holahan says.
Holahan, who worked on Massachusetts health care law, says the state had already prohibited both pre-existing conditions exclusions and limited medical underwriting before its overhaul in 2006.
Holahan says, "It wasn't as big of a step for them."
Nearly three-quarters of people buying insurance in the individual market - or 10.8 million people - are eligible for subsidies because of their incomes, according to a report out Thursday by the advocacy group Families USA. That includes individuals earning less than $46,000 and families of four earning less than $95,000.
The group estimated that 1.5 million people won't get subsidies. That doesn't count people who buy health insurance only for a few months, such as people changing jobs. Adding them boosts the total to 4.4 million.
Stack, who lives in The Woodlands, Texas, has been shopping for a plan she can afford on the federal exchange. She says the ACA has a communication problem when it comes to people in the middle class.
"This is really for catastrophic care, but I'm not seeing it sold in that manner to the American public," she says.
Jayne O'Donnell and Paul Overberg, USA TODAY