Residents along the Minnesota-Wisconsin state border are paying different premiums for individual health insurance policies depending on where they live.
Stillwater, Minn.-based insurance agent Dennis Conger said that health exchange premiums in Wisconsin's Pierce, Polk and St. Croix counties are nearly twice the rate as premiums in the Twin Cities. The Pioneer Press reported it found the same differences when it analyzed premiums available on health exchanges operating in the two states, plus 34 others.
"Is it because they eat too much cheese and drink too much beer over there?" Conger joked. "I don't think so. I'm from Wisconsin — I'm a cheesehead."
Minnesota officials have said the 2014 Minnesota rates are among the lowest in the country.
Under the federal Affordable Care Act, health insurance companies set premiums within geographic boundaries called "rating areas." The 36 states in the newspaper's analysis are divided into 406 rating areas.
One of those is the Twin Cities, a rating area that has the lowest "benchmark" premium for a 50-year-old who doesn't smoke, according to data from the U.S. Department of Health and Human Services, and the states of Maryland and Minnesota. The newspaper found that the rating area that covers Pierce, Polk and St. Croix counties in western Wisconsin has the second-highest benchmark premium for a 50-year-old nonsmoker.
The California-based Kaiser Family Foundation has also researched the issue.
The foundation found that when looking at benchmark premiums as well as the cheapest "bronze"-level plan for a 40-year-old nonsmoker, the Twin Cities area has the lowest premiums nationwide. But in Pierce, Polk and St. Croix counties, a 40-year-old nonsmoker would pay the fourth-highest premium in the country for the benchmark plan and the highest premium nationwide for the bronze offering.
"That's probably one of the greatest disparities in cost for neighboring regions," said Cynthia Cox, a foundation researcher.
There could be many reasons for the disparity.
Cox said fewer insurance companies are on the Wisconsin side of the border, so the lack of competition could lead to higher rates. Linda Skoglund, an insurance agent in New Richmond, Wis., said lower premiums in the Twin Cities could be due to narrow network health plans, where consumers pay less but face more limits on doctors they can see. Those plans aren't available in Wisconsin.
Health insurance experts also say the difference is due to a convergence of policy decisions in each state when it comes to high-risk pool programs, the state-federal Medicaid program and when people in the individual health insurance market can renew their policies.
The disparity apparently has almost nothing to do with the fact that Democrats in Minnesota created a state-based health insurance exchange, while Republicans in Wisconsin left exchange operations to the federal government. Minnesota is one of 16 states plus the District of Columbia operating their own health insurance marketplaces; the federal government operates one marketplace for the remaining 34 states, including Wisconsin.
Still, Minnesota rates aren't always cheaper. For example, the benchmark premium for a 50-year-old in southeast Minnesota is more expensive than in 11 rating areas across Wisconsin.