I’m often asked if health care insurance premiums in southeastern Wisconsin are really higher than elsewhere and if so, why. Since most of my business is local, my answers are usually anecdotal but recently, I experienced a more concrete – and shocking – example.
I’m helping a new business in Washington, D.C., set up their first small group health plan. The employer and census details are, of course, confidential. And, I’ll not name any one insurer (but we are quoting the usual national “players”). There’s nothing irregular about the suggested plan design(s) being quoted either; a standard $1,000 deductible with office visit and drug co-pays or a "qualified” (i.e, HSA eligible) high-deductible health plan. For both plans – identical benefits and identical census – the premiums in D.C. are dramatically below the rates from the same insurer for southeastern Wisconsin.
Two quick examples: a 46-year-old male with a spouse and three children – the monthly premium for the $1,000 deductible/co-pay plan would be $1,489 here, but only $815 in D.C. Or how about a 33-year-old male with a spouse and one child – the HSA HDHP here would cost $707, but in D.C. only $394. (No, that is NOT a typo – family coverage for under $400.)
One small group is hardly a fair test. In this case however, the premiums average 45 percent less for a business located in Washington, D.C., than for the same business if located in Milwaukee. Stunning!
I’m going to have to ask some of my agent/broker peers in other cities help me gather additional data. This is just too curious. Stay tuned.
Jon Rauser is president of The Rauser Agency Inc., Milwaukee. He writes an ongoing blog about the health care industry at www.rauserhealthreview.com.
