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Rural residents pay more for exchange plans than city dwellers: report


By Paul Demko
Posted: August 5, 2014 - 7:00 pm ET
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Rural residents paid slightly higher premiums on exchange plans in 2014 than their urban counterparts, according to a new analysis of plan filings. The average monthly premium for the second-cheapest silver plan, which is designed to cover 70% of medical costs, was $387 in rural counties, compared to $369 for urban counties.

But those in states with a large percentage of rural residents, regardless of where they lived, saw significantly higher premiums this year. For states with less than 5% of residents living in rural counties, the average premium was $402. But for states where more than half of the population lived in rural counties, the average monthly premium was $452.

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Those figures come from an analysis conducted by researchers affiliated with the Robert Wood Johnson Foundation and the Leonard Davis Institute of Health Economics at the University of Pennsylvania. The study defined urban counties as those that include, or are adjacent to, a metropolitan area with a population of at least 50,000. Roughly 40 million urban residents were eligible for exchange policies, compared to just 6.6 million rural residents.

Urban residents also had a few more coverage choices. On average, they could select from 17 different plans offered by five different carriers. For rural residents, there were roughly 14 plan options available from four insurers.

Rural residents also were less likely to have narrow-network options, which are often cheaper than plans with broad provider networks. Just 18% of rural counties offered such plans, compared to 38% of urban counties.

“That might be less feasible of an option for carriers in areas where there are less providers to begin with,” said Katherine Hempstead, who directs coverage activities for the Robert Wood Johnson Foundation.

Some states saw significant gaps in premium costs between rural and urban residents. In Nevada, the average premium for rural residents was more than $200 greater than for urban exchange customers, while in Colorado the difference was $181. But for 15 states, the discrepancy was $10 or less.

Hempstead said it will be interesting to see how the urban-rural dynamic evolves as more carriers offer products on the exchanges for the 2015 open-enrollment period. “This is obviously a market that's not at equilibrium yet,” she said.

Follow Paul Demko on Twitter: @MHpdemko


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