Health-care insurance cheaper in the suburbs
HEALTH INSURANCE | Firm's data show the farther you live from downtown Chicago, the less expensive your monthly coverage
Why would people who live in inner-ring suburbs such as Berwyn, Evanston, Oak Lawn and Oak Park be able to obtain health-care insurance quotes that are 14.6 percent, on average, lower than their Chicago neighbors?
Based on major health-insurance carriers' rates and policies, people living 15 miles to 25 miles from downtown Chicago pay 12 percent to 15 percent less on their monthly premiums, and those who live 25 miles to 40 miles outside of the city pay 20 percent to 30 percent less, according to data compiled by Norvax Inc.
(Jean Lachat/Sun-Times)
Insurance company No. 1
Chicago, ZIP code 60607 ................................................... $143.41
Berwyn, ZIP code 60402 .................................................... $126.92
Kankakee, ZIP code 60901 ................................................. $106.22
Insurance company No. 2
Chicago, ZIP code 60607 ................................................... $106.24
Berwyn, ZIP code 60402 .................................................... $92.70
Kankakee, ZIP code 60901 ................................................. $80.20
Insurance company No. 3
Chicago, ZIP code 60607 ................................................... $175.87
Berwyn, ZIP code 60402 ................................................... $163.77
Kankakee, ZIP code 60901 ................................................ $157.08
Source: Norvax, Inc.
Chicago-based Norvax makes software that lets people search for the lowest or best private coverage offered by insurance brokers and agents. Norvax's public exchange, which boasts more than 80 insurance carriers, operates as GoHealthInsurance.com. Norvax's consumer markets team culled the data by running GoHealthIn surance.com quotes using 3,029 ZIP codes and 963 plans in Illinois, and then narrowing the field to the Chicago area.
Perhaps the most surprising finding is that people who live in the suburbs south and west of Chicago, areas generally considered blue-collar, pay 24.5 percent less for health-insurance coverage than do Chicagoans. People who live north of the city pay 14.6 percent less.
Brandon Cruz, a software developer who co-founded Norvax with salesman Clint Jones, said he wasn't shocked by the results because "different areas have different costs, based on the hospitals, doctors and [health-care] networks in those areas. The findings highlight the cost of health care in these areas."
Judy Dugan, research director for Consumer Watchdog, a Santa Monica-based public policy advocacy group, said that while she couldn't reach specific conclusions without the underlying data, the findings point out that today's individual-coverage insurance market "is the Wild West" partly because each person is buying customized coverage that is largely unregulated.
Dugan speculated that many insurance companies don't want to do business in an urban area because "they like a mommy and a daddy and three healthy kids" as clients.
"It's one reason we need health-care reform -- to get rid of this kind of weird disparity in pricing," Dugan said.
Separate data from the latest U.S. Census Bureau from 2008 reveal that 26.5 percent of Chicagoans ages 18 to 64, or 470,344 residents, have no health-insurance coverage.
Among Chicagoans 65 and older, 3.8 percent, or 10,731 of the city's elderly, have no health-insurance coverage.
In contrast, the census data show that in Evanston, 6.8 percent of people ages 18 to 64, or 3,393 residents, have no health-insurance coverage, while, statistically, virtually everyone 65 and older is covered.
These differences are created by state regulations and also by the insurance companies themselves.
The insurance companies typically divide a state into as many as eight geographical zones. While premiums are largely determined by the overall health of people who live in each zone, the insurer's ability to negotiate discounted rates for services within its provider network in each zone also is a key factor. The amount of health-care services policyholders use in each zone, including prescription-drug use, also plays a factor in the premium differences.
Experts say any major health-care reform that Congress passes will change the balance of the insurance equation by banning insurers from charging women more than men, barring caps on lifetime benefits, limiting how much more insurers can charge older policyholders than younger ones, and prohibiting insurers from denying coverage to people with pre-existing conditions.
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