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Rural Areas See Higher HIX Premiums, Fewer Options

John Commins, for HealthLeaders Media, August 13, 2014

The cost of having fewer choices doesn't spare healthcare. Most rural residents can expect to pay more for coverage purchased on health insurance exchanges.

Competition among health plans is a critical component that tempers prices for individual health insurance coverage under the exchanges set up by the Patient Protection and Affordable Care Act.

It makes sense. Give healthcare consumers more informed, apples-to-apples choices among several health plans competing for business on an open exchange and the consumers will gravitate to the best value.

That works in urban and more densely populated areas that have a number of health plans competing for customers using a plethora of providers. What about sparsely populated rural areas?

The answer is not surprising. People in rural areas mostly have fewer coverage options, and because of that most of them—though certainly not all of them—will pay higher premiums.

That's according to a study from the University of Pennsylvania and the Robert Wood Johnson Foundation. It's hard to provide a blanket conclusion to the report because it is fairly nuanced and provides several scenarios involving a 50-year-old non-smoker shopping for silver plan coverage in 2014.

"Rural residents do not have as many choices as urban residents in terms of premiums, issuers, plans, and plan types. They also have less availability of Health Maintenance Organizations, Exclusive Provider Organizations, and Preferred Provider Organizations, and greater availability of Point of Service plans," the study says.

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