An average state employee was on the hook for about 16 percent, or $155, of his monthly $963 premium, including coverage for dependents. Premiums were low in a handful of states spread throughout the south — Arkansas, Mississippi, New Mexico, South Carolina — and South Dakota. They were also very high in a handful of Northeast states — New Hampshire, New Jersey, Vermont — as well as Alaska and Wisconsin.
In order to compare the highly variable state plans, Pew teamed up with the actuarial firm Milliman. What they found was that some of the variation in premium cost was due to factors policymakers can control, such as the plan’s structure and “richness” — a reference to the employer-paid share of the overall cost of a plan. But other factors, such as the age, gender and health status of enrollees and regional differences in pricing and physician practices, were out of their hands.
On average, state plans were relatively “rich.” They cover 92 percent of a typical enrollee’s costs, which would earn the plans a “platinum” rating were they available on the new exchanges created by the president’s health care law. Nationwide, 45 percent of state employees were enrolled in plans with no deductible whatsoever.
As the chart below shows, spending varies both by state and by the plan offered. The top blue bar for each state represents the monthly employer and employee contributions to an employee-only plan. The central bar shows the overall average monthly per-employee premium and the third blue-green bar shows the contributions toward plans that cover employees and their dependents.
Even after controlling for household size and factors policymakers can control, such as plan richness and differences in plan type, the researches still found big variations — a sign that much of that variation in price can’t be adjusted by policy. Monthly premiums per employee still ranged from $387 to $846, they found, as shown by the map below.
The researchers resisted ranking states precisely because of that remaining variation: It wouldn’t be fair to compare South Dakota’s $387 monthly premiums to Alaska’s $846, especially since so much of that difference appears to come from factors lawmakers can’t control.
One such uncontrollable factor is the age of a state’s population, which can heavily influence cost. As the chart below shows, commercial health insurance costs are typically high at birth but drop rapidly over the first few years of life before climbing back over the subsequent decades.
Premium contributions can affect total costs because they can give enrollees an incentive to choose more or less expensive plans. In North Carolina, for example, the state bases how much it pays off of the lowest-cost plan. If employees want a more expensive plan, they have to cover the premium difference, a fact that likely drives more of them to choose cheaper plans.
Plan options can also affect cost. Employees may see an incentive in putting dependents on their plans if the difference in the premium contribution is relatively small — again, an incentive that could drive up state costs. And a greater variety in plans offered can keep costs low as some employees opt for middle-ground choices over more-expensive plans.
Cost sharing can also affect behavior. The less the state pays for certain services, the more likely an employee is to reconsider whether they’re needed. Offering plans with higher deductibles, as more and more private-sector companies have done lately, can similarly change behavior.
The following map shows how much each state spends on monthly premiums per employee. Darker shading represents higher cost to the state. Click a state to see more detailed data. Data was unavailable for Pennsylvania.