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Why do Health Insurance Rates Vary by Region?

Posted November 21, 2014 by Eric Tiffany in Health Insurance, Personal Lines

The Affordable Care Act, ObamaCare.  Whatever you want to call it, it has brought our attention to a topic that most people, in year’s past, have been avoiding like the plague.  One question that has come up through the Affordable Care Act’s most recent open enrollment period is, why is my health insurance more expensive if I live in a rural area versus closer to a metropolitan area?

The simple answer to this often times perplexing question is, in short, competition.  Health care markets in Minnesota are very local.  The larger metropolises consist of more providers thus are competing to keep their prices down so that your health insurer will do business with them.  With less competition, doctors and hospitals link together in large groups to be able to negotiate higher payment for rates and services.

There are also many other factors that can be accounted for when it comes to higher rates in different regions of the state.  People might be sicker in some regions and need more care, or doctors may opt for treatments that are less or more expensive.  As we’ve entered into another ObamaCare enrollment period, the amount of insured Americans should increase and over time, our rates, regardless of geographical region should continue to decrease.  Time will tell.



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