According to a recent study by the University of Pennsylvania and the Robert Wood Johnson foundation, residents of urban areas often paid lower premiums on the public exchange than residents of rural areas. While rural residents as a whole did not face higher premiums, differences emerged within and between areas and states depending upon the distribution of their populations. The study identified rural areas’ insurance market concentration, lack of economies of scale, and lack of competition among providers as the main factors driving the variation in exchange premiums.
The study also noted that rural residents faced less competition and higher premiums even before the ACA was enacted. Nonetheless, the launch of the public marketplace has yet to correct this imbalance. Lower cost narrow-network plans were available in only 18% of rural counties, compared to 38% of urban counties. In addition, a 50 year old individual’s silver plan premium in states where over half of the exchange population was rural was $50 higher than states where less than 5% of the population was rural.
Urban premiums were lower than rural premiums in 32 states, and were higher than rural premiums in only 11 states. Seven states and the District of Columbia either had no difference or included only urban counties. Although Wisconsin’s population is 27% rural, the average Wisconsin exchange rate for rural areas was actually $2 lower than the state’s average urban premium.
Click here to read the complete data brief on the Robert Wood Johnson Foundation’s website.