Salt Lake, Davis getting bargains on Obamacare exchange
Reform • Salt Lake City area among 10 U.S. regions with cheapest insurance prices.
Published: February 14, 2014 10:01PM
Updated: February 14, 2014 10:25PM

Residents in Salt Lake and Davis counties are getting a bargain on Obamacare’s online insurance marketplace — at least, compared to other parts of the country.

An analysis of health exchange insurance prices by Kaiser Health News and NPR found premiums in the two-county region to be at least half the price paid by the country’s most expensive regions.

It ranks 7th among 10 regions with the lowest premiums, a group that includes the entire state of Hawaii and eastern Tennessee, says the report, which looked at monthly premiums for a 40-year-old purchasing a silver plan on www.HealthCare.gov.

The cheapest areas share some characteristics, notes the report’s author, Jordan Rau. They tend to be competitive markets where insurers can better negotiate cheaper rates with hospital systems.

Utah differs in that it’s dominated by two insurers — Intermountain Healthcare’s SelectHealth and Regence BlueCross BlueShield — who for years have claimed 60 percent of the individual and small business market.

Yet the Beehive State has long enjoyed lower-than-average insurance prices. The average monthly premium for an individual plan ($173) outside the exchange mirrors exactly Salt Lake’s price for the lowest-cost silver plan on the exchange.

Industry experts have attributed Utah’s low rates to the state’s demographics — its youth and relative health — and the influence of Intermountain Healthcare, which has been lauded for delivering high-quality, cost-effective care.

Utah’s predominantly Mormon, teetotaling residents spend less per capita on health care than residents of any state in the nation. But the insurance prices they pay aren’t exactly commensurate with their bottom-of-the-barrel spending — while below average, they’re not the lowest prices.

The Affordable Care Act has changed dynamics by injecting more competition.

An example: the launch of Arches Health Plan, a member-owned, member-governed health cooperative. Bankrolled by a federal loan, co-ops have a mandate to focus on traditionally underserved and uninsured populations.

And the latest health exchange enrollment numbers showing Arches with 21 percent of Utah’s 29,000 exchange enrollees suggest the company is primed to succeed, says CEO Linn Baker.

“Finding ourselves with 21 percent market share on the federally facilitated marketplace, particularly in communities new to insurance, it means we’re on the right track,” Baker said.

To entice young people, many of Arches’ health plans have no deductible for accidents. The non-profit says their average subsidy-eligible family saved $330 a month or almost $4,000 a year on premiums.

Many of Utah’s cheapest exchange plans, though, have narrow provider networks, a strategy used by insurers to wangle deeper discounts from health systems, but that limits consumer choice.

See the rankings

Here is the Kaiser Health News/NPR ranking of the lowest cost monthly premiums on the exchange at HeathCare.gov:

$154 • Minneapolis-St. Paul region

$164 • Northwestern Pennsylvania

$166 • Middle Minnesota

$167 • Tucson, Ariz.

$171 • Northwestern Minnesota

$173 • Salt Lake and Davis counties

$176 • Hawaii

$180 • Knoxville, Tenn.

$180 • Western and North Central Minnesota

$181 • Chattanooga, Tenn.