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Cheapest US health care city?

By Jay MacDonald · Bankrate.com
Tuesday, September 6, 2011
Posted: 9 am ET

Shopping for cheap employer-sponsored health insurance? You might want to avoid upscale destinations in Arizona and Florida and instead look into a job in "flyover country" -- Texas, Arkansas and the Midwest.

According to a new study by Thomson Reuters, moving from the nation's most expensive to the least expensive employer-based health care market could save you $4,600 per year.

We've long known that health insurance costs vary depending on where you live. The problem is that unlike auto insurance and homeowners insurance, trying to break down health coverage apples-to-apples by locale will have you talking to yourself in a hurry.

Thomson Reuters' healthcare business funded its own study into the use and cost of healthcare services for 23.5 million Americans in 382 metropolitan statistical areas (MSA) in 2009. It found that the highest-spending MSA was Anderson, Ind., at $7,231 per person; the lowest was Ogden-Clearfield, Utah, at $2,623 per person.

Here are the 10 highest- and lowest-spending regions based on employer-sponsored health insurance along with their annual health care costs per person:

10 highest-spending MSAs
Anderson, Ind. $7,231
Punta Gorda, Fla. $7,168
Racine, Wis. $6,528
Naples-Marco Island, Fla. $6,312
Ocean City, N.J. $6,128
Barnstable Town, Mass. $6,123
Flint, Mich. $6,061
Lake Havasu City-Kingman, Ariz. $5,977
Ocala, Fla. $5,976
Carson City, Nev. $5,931
10 lowest-spending MSAs
Ogden-Clearfield, Utah $2,623
Dubuque, Iowa $2,719
Fayetteville-Springdale-Rogers, Ark.-Mo. $2,762
Fort Smith, Ark.-Okla. $2,916
Laredo, Texas $2,919
Amarillo, Texas $2,942
McAllen-Edinburg-Mission, Texas $2,950
Salt Lake City, Utah $2,979
Fargo, N.D. $2,996
Sioux City, Iowa $3,029

To some degree, the study's findings underscore the difficulty of comparing health insurance by locale. For instance, these findings in some cases differed greatly from similar attempts by Medicare to pin down regional health care cost variables. And there's no telling whether the cost disparity or corresponding MSAs would be similar for private health insurance across the U.S.

As a Florida resident, what jumped out at me was that 3 of the 10 costliest MSAs for health insurance were in relatively small, well-to-do enclaves in my state. Conversely, having lived in Texas, I can attest that places like Loredo, Amarillo and Fort Smith, AK are not known for their lifestyles of the rich and famous.

Although the study doesn't make this conclusion, its findings lead me to believe that health insurance costs in this country are largely influenced by the ability to pay. Insurers can get top dollar in places like Marco Island or The Villages near Ocala, Fla., but not in Fargo, N.D., or Ogden, Utah.

What I long to see one day is a study that can justify this sorry status quo based on something -- anything -- besides sheer profiteering by the health insurance industry.

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5 Comments
Cory Marcos
September 15, 2011 at 5:02 pm

F. Sandow,

I'm one of those people victimized by current trends like this http://www.cheapinsurance123.com/blog/2011/08/25/cheap-health-insurance-may-disappear-as-companies-consider-dropping-benefits/

As coverage get more expensive, ordinary employees have to work harder to get the same value in their jobs, and with the increase in stress and sheer output of energy, the value of health benefits increase proportionally. That's the rock. The hard place are the bank and insurance companies still trying to eke out profits in this economy.

F. Sandow
September 06, 2011 at 5:11 pm

Interesting study. I just was looking over detailed explanation of benefits statements from my employer provided medical insurance company. The EOBs are for two recent hospital visits. I was amazed and appalled by the charges as well as the 'negotiated' rates. "Obamacare" or not, we need to do something to hold both the hospitals/doctors AND insurance companies accountable! While I do have the insurance coverage, my out-of-pocket expenses were NOT negligible. And my insurance is expensive probably because my company is based in California??