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California health insurance premiums lower than in other states

August 10, 2011|By Duke Helfand, Los Angeles Times

Californians who bemoan high insurance premiums may not have it as bad as they think. It turns out that people in other states pay a lot more for health coverage.

A new analysis of individual insurance markets across the country shows that Californians paid $157 a month on average for coverage in 2010.

Nationally, individual policyholders paid an average of $215 a month, according to the study by the nonprofit Kaiser Family Foundation.

The least expensive state was Alabama. Policyholders in that state's individual market paid an average of $136 a month last year. The most expensive states included Massachusetts and Vermont, where individuals coughed up more than $400 a month on average.

"This analysis suggests substantial diversity in the insurance people buy across the country," the authors said.

The Kaiser analysts said that the variation in premiums across states was due to different costs of living, healthcare spending, the age of the insured populations and other factors.

They said insurance tends to be more expensive in states that have broadened access by making it easier for people with preexisting medical conditions to get policies.

Meanwhile, states such as California that allow health insurers to reject applicants because of their medical conditions may have lower costs because insurers can weed out unhealthy people who drive up medical spending.

The study also noted that policyholders in lower-cost states may face higher deductibles and out-of-pocket spending that offset savings from cheaper premiums.

The California findings were based on policies from the largest insurer in the individual market, Anthem Blue Cross, which accounted for the majority of enrollment in that market.

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