Health Insurance Premiums by State

Read our Advertiser Disclosure.
Contributor, Benzinga
August 18, 2022

Health insurance premiums (your monthly cost for the health insurance plan you have) vary across the country depending on your situation. From the current cheapest healthcare premiums found in Georgia to the priciest premiums in West Virginia, what affects that price? Why is there such a difference from state to state in health insurance prices?

It’s obvious that location is a huge factor, but what determines the price of health insurance for individuals and families? Read on to learn everything you need to know about what you’ll pay for your insurance coverage based on your location.

Why Do Health Insurance Costs Change From State to State?

Plenty of factors help to explain the disparity in the cost of health insurance over state lines, from average costs in the $400 range in states like Arkansas and Colorado all the way up to an average premium of $831 in West Virginia. Why is there such a huge difference in what you pay for your coverage, even if your friend in Vermont has the same health insurance plan and company as you do in South Carolina? Here are some things that affect the cost of health insurance premiums.

  1. State and federal laws: This is the largest factor in determining how much you will pay for your healthcare premium. Federal and state laws dictate how much your employer is required to cover for its employees, meaning both monetary value in healthcare services and type of insurance, be that overall, dental or optical. State laws differ greatly in what they require of certain companies to provide for their employees.
  2. Poverty: It’s notable that the second-poorest state in the country, West Virginia, has one of the highest premiums ($831) on this list. This is an example of how low-income individuals typically pay more for their premiums, paradoxically. However, this is sometimes mitigated by federal subsidies and programs like California’s Medi-Cal.
  3. Employer size: Large conglomerates on the whole regularly have cheaper health insurance plans for their employees simply because they have so many — kind of like when you claim a bulk discount when purchasing items like cleaning supplies. Therefore, if you’re an employee of a corporation or a system like public schools or government work, you are likely to pay less per month for your premium.
  4. Type of insurance plan: There are multiple types of health insurance policies. If your insurance functions as a health maintenance organization (HMO), you’ll need to see specific healthcare providers every time you use coverage outside of an emergency situation. HMO policies are more strict than preferred provider organizations (PPOs), which allow you to see any doctors and specialists you want, regardless of the network they operate within. If you’re looking to save money on your health insurance, consider purchasing an HMO plan. 
  5. Age: This factor may get overlooked when you’re trying to digest the big picture, but once you reach your fifties, health insurance premiums skyrocket. As you get older, you’re more likely to run into expensive health insurance problems or need to seek care more regularly. Health problems associated with aging mean that the insurance company is likely to spend more on your care, which results in more expensive premiums. 

Does Your Preferred Insurer Operate in Your State?

Blue Cross Blue Shield is an example of one of the most widespread health insurance companies, and it does operate in every state. Another company, Cigna, is a global company, but it only offers comprehensive health insurance plans in a little more than a dozen states. Some health insurance companies (like Aetna) only offer coverage in a few states while also adjusting where they operate on a near-annual basis. Whether or not your preferred health insurance provider operates in your state will vary depending on the licenses the insurance provider has and whether or not its coverage meets all of your state’s policy requirements.

Many health insurers will still cover out-of-state care if you need it, especially if you have a PPO and your insurance company operates across the country. This benefit depends on agreements your preferred insurer has with healthcare providers and healthcare systems in your state and elsewhere in the nation. Your insurer’s website should have information listing which states services are covered in, and if not, you can reach out to your representative and ask those questions. If you’re involved in a life-threatening accident or you suddenly need medical care, visit the nearest hospital — your health insurance provider must cover emergency care at any facility, regardless of the type of plan that you have.

Does Your State Pose Specific Risks That Others Do Not?

Poverty is a factor that is correlated to higher health insurance premiums, as is age. South Dakota’s premiums keep increasing each year, and one reason for that is because of the challenges in receiving adequate care due to a widespread population. For serious cases, people still have to be taken by helicopter to hospitals equipped to deal with their injuries or illnesses that occur in states like Wyoming or North Dakota. If you live in an area with a less robust healthcare infrastructure, you’ll pay more for your insurance. 

In the case of certain states, federal subsidies from Medicaid and Medicare result in private health insurance companies raising their prices. If your state has Medicaid and Medicare that is well regulated and runs relatively smoothly, you should be in the clear for cheaper health insurance premiums. However, if it’s hard for the general population to qualify for government subsidies to receive these benefits, then your state is unfortunately one of the more challenging ones in which to afford adequate healthcare.

Does Your Employer Contribute to Your Insurance?

Yes and no. The answer to this question depends on who your employer is and where the business is located. Some employers may provide health insurance if you work a certain number of hours per week, but not if you only work a few. Some may not provide it at all because they are smaller businesses without the number of employees to receive a bundle discount with a health insurance provider. Other employers are known for their comprehensive insurance coverage, and use robust insurance packages to attract and keep top talent in their industry. 

If you aren’t sure what percentage of your health insurance your employer covers or what your plan includes, consult with a representative from your human resources department. In most states, your employer is required to cover at least a percentage of your health insurance costs once the business hires a certain number of employees. The percentage requirement and the number of employees the business must have to be required to provide insurance varies by state. 

Is Medicaid in Every State the Same?

No. Each state has different eligibility when it comes to Medicaid. Medicaid and Medicare do not operate in the same way. Medicare is a program for the elderly run by the federal government, meaning that benefits are the same in every state. Medicaid is for anyone who qualifies (usually based on income), but each state has different criteria for eligibility. You cannot use your Medicaid coverage in another state unless you suffer a life-threatening medical emergency while you’re not in your home state.

Advantages of Health Insurance

If you’ve been living without health insurance, you could be putting both yourself and your family at risk. Some of the advantages that come with having health insurance include the following. 

  • More affordable medical bills: Healthcare in the United States is exceptionally expensive without insurance. If you don’t have health insurance and you’re involved in an accident, you could find yourself with thousands of dollars in medical bills.
  • Help with preventing future illness: When you catch a developing illness or condition early, it’s less costly and time consuming to correct. Most insurance policies include free or low-cost preventive care to reduce the chance that you develop a serious medical problem. Using these benefits helps you live longer and enjoy better overall health. 
  • Guaranteed benefits: Thanks to regulations set in place by the Affordable Care Act, your health insurance company needs to cover at least the 10 essential benefits outlined by the federal government. Essential health benefits include maternity care, support for mental health and substance abuse, ambulance rides, emergency surgeries and much, much more. So long as you have insurance through your employer or you buy a Marketplace insurance plan, you can rest with the peace of mind that comes with knowing your insurance provider is required by law to cover at least these benefits. 

Compare Health Insurance

Choosing a health insurance policy doesn’t need to be difficult. Benzinga offers insights and reviews on the following health insurance providers. Consider beginning your search with a few of the links below. 

Frequently Asked Questions

Q

Which state spends the most money on Medicaid?

A

California is the state that spends the most money on Medicaid, with an annual expenditure of $85 billion. New York is the second highest spender when it comes to Medicaid benefits, with a whopping $60 billion spent each year.

Q

Which state has the best healthcare?

A

Hawaii rests at the top of the list for the best healthcare in the U.S. A robust healthcare system, a low population without insurance coverage and an overall high level of public health are a few of the factors that make Hawaii the state with the best healthcare. The average health insurance premium in Hawaii is right in the middle of the line at almost $500 per month.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.