Health Care Pricing Experiment

Inspired by a recent blog post from Mike Braun, a friend and colleague at Cohen-Seltzer in Pennsylvania, I have completed some similar market analysis that proved to be very eye-opening for me as well.  Here is what we did and why:

Since the Massachusetts approach has been the model for a number of the National health reform initiatives being proposed (Health Insurance Exchange, Coverage Mandates, etc.), and it has actually been in place for at least some time (since 2006), it seems fair to ask how MA’s individual health insurance pricing  compares with similar coverage options in LA and TX.  So, like Mike in PA, I used our agency health quoting engine to run rates for my family (I am 38, my wife is 36 and we have a 6 year old daughter and 4 year old son) in both Austin and New Orleans.  I used the Commonwealth Connector to find my Boston plan options.

In my comparison of key in-network benefits, I illustrate how 3 relatively rich benefit plans compare for my family.  All of these quotes are from Blue Cross affiliates.  However, as you see, the Boston plan is almost $1,500 per month – about 18% higher than the Austin plan and 30% higher than the New Orleans plan.  In addition, I had 16 options to choose from in Boston – ranging in price from $796 – $1,909 per month.  This is compared to well over 100 plan options each in Austin and New Orleans with prices ranging from $138 – $1,296 per month.

This was a very telling experiment for me.  It seems that the measures MA has taken have NOT produced better pricing, just fewer choices.

As our country tackles the very difficult issue of providing affordable healthcare for its citizens, I would hope some truly new and innovative, market driven approaches are considered.  We can and should do better than just model existing  flawed systems.

I stand by my previous health-care fix.  Let government govern and insurance companies insure risk, while patients and their doctors manage individual care with the proper incentives.


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