I'm often asked if health premiums in SE Wisconsin are really higher than elsewhere and if so, why. Since most of my business is local, my answers are usually anecdotal but just this week, I experienced a more concrete - and shocking - example.
I'm helping a new business in Washington D.C. set up their first small group health plan. The employer and census details are of course confidential. And, I'll not name any one insurer (but we are quoting the usual national 'players'). There's nothing irregular about the suggested plan design(s) being quoted either; a standard $1000 deductible with office visit and drug co-pays or a "Qualified (i.e, HSA eligible) High Deductible Health Plan. For both plans - identical benefits and identical census - the premiums in D.C. are dramatically below the rates from the same insurer for SE Wisconsin.
Two quick examples: a 46 year old male with a spouse and three children - the monthly premium for the $1000 deductible/co-pay plan would be $1,489 here but only $815 in D.C. Or how about a 33 year old male with a spouse and one child - the HSA HDHP here would cost $707 but in D.C. only $394. (No, that is NOT a typo - family coverage for under $400 !!!!)
One small group is hardly a fair test. In this case however, the premiums average 45% less for a business located in Washington D.C. than for the same business if located in Milwaukee. Stunning!
I'm going to have to ask some of my agent/broker peers in other cities help me gather additional data. This is just too curious.Stay tuned.