Bay Area rates high in affordability for individuals

The San Francisco Chronicle

The Bay Area is among the most affordable places in the country to buy individual health insurance, according to a survey released Wednesday.

San Jose, San Francisco and Oakland tied for fifth place among the 50 largest cities in the country for lowest-cost insurance, with an average premium of $58 a month, according to a study by eHealthInsurance Services Inc., a Mountain View Internet health insurance broker.

The survey found huge disparities in premiums around the country. Long Beach, at $54 a month, had the cheapest coverage, while insurance in New York cost $334.09, six times more. Boston, at $267.57, had the second-highest average premium.

The broker compared rates for a 30-year-old nonsmoker with no serious health problems seeking a plan with a $1,000 deductible and 20 percent coinsurance, or cost sharing.

About 4,000 separate insurance products offered by some 140 carriers were examined.

Those who buy their own health insurance and are not covered through work are estimated to make up less than 10 percent of the population nationwide.

The percentage, however, is greater in some Bay Area counties due to high numbers of independent contractors and people who lost job-based coverage.

New York and Boston are expensive because their states have laws that guarantee individuals coverage, regardless of any preexisting medical conditions.

In other states, including California, many individuals with histories of health problems are either rejected or offered expensive premiums. That makes insurance cheaper for the young and healthy.

In all, seven of the eight most- affordable cities were in California, despite the fact that the state’s cost of living is high in many other respects.

Insurance is relatively affordable in the state because of the high number of Californians in health maintenance organizations and the prevalence of health-conscious lifestyles, said Bob Hurley, vice president of eHealthInsurance.

About 50 percent of insured Californians are covered through an HMO, the most restrictive, but cheapest, form of insurance.

Competition among insurers, hospitals and medical groups in the Bay Area also holds down premiums, he said.

Some consumer advocates criticized the survey, arguing that using a healthy 30-year-old for insurance comparison purposes doesn’t tell the whole story of access to affordable care.

Jerry Flanagan, health advocate for the Foundation for Taxpayer and Consumer Rights, said California has a bad record in terms of insurance companies turning down applicants. “It can be almost anything — from past use of anti-depressants or an injury that required no further medical coverage,” he said.

Mario Gamez, 43, of San Ramon, discovered that when he and his family applied for individual coverage through Blue Shield of California earlier this year “they accepted me right away, but they rejected my wife and rejected my daughter.”

His said his 30-year-old wife was rejected because she underwent laparoscopic surgery two years ago to correct a minor medical condition.

His daughter was eventually accepted after notes a doctor had written about the child proved inconsequential. After battling the insurer for four months, Gamez found group coverage for the family through a professional organization.

Only about 14 percent of eHealthInsurance’s customers are rejected due to preexisting conditions, Hurley said.

At 29 and with no history of health problems, Shannon Ratay of Berkeley is exactly the kind of customer insurers want. Ratay found coverage through Blue Cross of California for $45 a month with a $5,000 deductible.

Ratay, who is starting a new job with health coverage, said the high deductible policy was a good deal in the short run. “I was basically preventing financial ruin through a catastrophe, say an accident,” Ratay said.
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CHART: The least and most affordable

These are the average monthly premiums for the most and least affordable cities in the United States for individuals buying health insurance:

Most affordable:
Long Beach $54
Sacramento $56
Fresno $56
San Diego $57
Columbus, Ohio $57.91
San Jose $58
San Francisco $58
Oakland $58

Least affordable:
New York $334.09
Boston $267.57
Miami $151.20
Dallas $146.42
Houston $146.28

Source: eHealthInsurance Services Inc.
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E-mail Victoria Colliver at [email protected]