Hospital Prices

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Why Health Insurance in the Bay Area Costs More Than in SoCal

(Justin Sullivan/Getty Images)

(Justin Sullivan/Getty Images)

Over at the New York Times, Elisabeth Rosenthal continues her terrific series on the high cost of health care in America. Tuesday’s installment is a deeply-reported look into the murky world of hospital prices, where a “stitch tops $500,” says the headline.

The lowest-cost silver-tier plan costs 26 percent more in Alameda County vs. Orange County.

But it’s where Rosenthal sets most of her reporting that makes the story a must-read for anyone in the Bay Area. She profiles patients receiving care at California Pacific Medical Center, a Sutter Health hospital — and her piece indirectly brings up the question of higher health insurance premiums here.

These higher premiums were made evident when Covered California released its plans for all the 19 “rating regions” of the state. In Alameda County, for example, the “silver tier” premiums for a 40-year-old range from $317 to $365. In Orange County, the range is $252 to $290 and Kaiser coming in at a high of $332. In other words, the lowest-cost silver-tier plan is 26 percent more expensive in Alameda County vs. Orange County.

Glenn Melnick, a health economist at USC, is quoted throughout the Times piece, and I called him Tuesday morning to talk about this NorCal vs. SoCal difference. “I would say that hospital prices represent a disproportionate share of that differential,” he said, and added that premiums are higher in the Bay Area even after accounting for the higher cost of living here. Continue reading