How does where I live affect how much I pay for health insurance?

Got questions about the Affordable Care Act? The WHYY/NewsWorks Health and Science Desk provides “The Short Answer.” Today’s Question: How does where I live affect how much I pay for health insurance?

Got questions about the Affordable Care Act? The WHYY/NewsWorks Health and Science Desk provides “The Short Answer.”

Today’s Question

Under the Affordable Care Act, how does where I live affect how much I pay for health insurance?

The Short Answer

First and foremost, each region has its own quirks. There’s a mix of hospitals and insurers, and those levels of competition very much influence how much people pay for coverage. The same plan costs more in Philadelphia than it does in Pittsburgh, for example.

But now, because of the Affordable Care Act, geography matters a bit more — specifically for people shopping on the individual market and for small group plans (basically, businesses with fewer than 50 employees). A region’s so-called “community rating” — the risk factors for an entire market area — now has a greater influence on how premiums are calculated.

Why?

Before the Affordable Care Act, insurers could base premiums on a number of factors — how sick you are, how much care you’re likely to use. If you’re female, for instance, premiums would typically cost more.

That stuff is now a no-no.

Starting on Jan. 1, 2014, individuals or small groups in the same region have to be offered the same premiums — with insurers being able to tweak rates based only on age, family size and tobacco use.

So who wins and who loses?

Good question. The new rules redistribute risk, working to even things out. As such, it’s good news for some folks and bad news for others.

Think about a small company with unhealthy workers. The new community rating system is a big win for a company like that. The risk pool against which that company’s premiums are calculated has just been expanded — by a lot — and those companies are likely to pay lower rates. However, experts say the flip side may also be true — healthy companies could have to pay more. Of course, all of this is still playing out and we’ll have to see what happens.

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The 2010 health law goes into effect Jan. 1, 2014. How will it affect you, your wallet and your health? Email your questions to healthandscience@whyy.org or tweet us @newsworksWHYY.